Tunisia Seeks to Borrow Billions from Central Bank Amid Economic Crisis

Move Raises Concerns of Inflation and Undermining Bank's Independence as IMF Bailout Remains in Limbo

Tunisian President Kais Saied is seeking to borrow up to 7 billion Tunisian dinars ($2.25 billion) from the Central Bank of Tunisia to address a 10 billion dinar ($3.2 billion) budget deficit.
The move is raising concerns about undermining the bank's independence, causing inflation, and further deterring foreign lenders and investors.
Tunisia is currently unable to borrow from traditional creditors, including the International Monetary Fund, whose proposed $1.9 billion bailout package remains in limbo.
Economist Aram Belhaj warns that amending the status of the Central Bank of Tunisia just to finance the government's budget brings with it numerous risks, notably inflationary, for the country's economy and relationship with its partners.
As Tunisia's presidential election approaches later this year, negotiations over the IMF's bailout package remain at an impasse due to Saied's reluctance to curb subsidies or reduce public sector wages.