Tunisia Curbs Credit for Non-Essential Goods as FX Reserves Dip

(Bloomberg) -- Tunisia has asked banks to stop giving credit to importers of non-essential goods as it seeks to curb a ballooning trade deficit and halt a decline in foreign-exchange reserves, according to central bank documents seen by Bloomberg.

The new rules, which were sent out to lenders earlier this month, demand that importers provide proof of existing funds to cover the cost of about 220 products deemed non-essential -- ranging from air conditioners and cosmetics to cheese and several kinds of fruit -- in order to free up hard currency for priority goods.

International tenders by state entities, such as those which import grain, are exempted from the rules, according to one of the documents.

The move mirrors import restrictions imposed in nearby Egypt as it struggled with acute foreign-currency shortages that virtually paralyzed trade and investment before the central bank floated the pound in November. Foreign reserves in Egypt have recovered since most capital restrictions were removed last year, but the currency has roughly halved in value and inflation has risen above 30 percent.

In Tunisia, growing pressure on the dinar, which is loosely pegged to a basket of currencies, has also drained foreign-exchange reserves. On Tuesday, net foreign-currency assets amounted to the equivalent of about $5.1 billion, according to central bank data, enough to cover only 96 days of imports.

The North African country has struggled to revive its economy since the 2011 uprising that ousted longtime dictator Zine El-Abedine Ben Ali. It has been rocked by repeated strikes and protests, while militant attacks have hammered the tourism sector. 

To contact the reporters on this story: Jihen Laghmari in Cairo at jlaghmari@bloomberg.net, Lin Noueihed in Cairo at lnoueihed@bloomberg.net.

To contact the editors responsible for this story: Alaa Shahine at asalha@bloomberg.net, Mark Williams, Tony Czuczka

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