Press Release No. 13/136

Press Release: IMF Reaches Staff-Level Agreement with Tunisia on Two-Year US$1.75 Billion Stand-By Arrangement

April 19, 2013

Ms. Christine Lagarde, Managing Director of the International Monetary Fund (IMF), issued the following statement on Tunisia today:

“I am pleased to announce that, in support of the government’s home-grown economic reform agenda, the Tunisian authorities and IMF staff have reached a staff-level agreement on a 24-month Stand-By Arrangement (SBA) in the amount of US$1.75 billion (equivalent to about SDR 1.14 billion, or 400 percent of Tunisia's quota in the IMF). This agreement will be subject to approval by the IMF’s Executive Board, which is expected to consider Tunisia's request next month.

“The SBA, once approved by the Executive Board, would support the authorities’ economic agenda aimed at preserving fiscal and external stability, fostering higher and more inclusive growth, and addressing critical vulnerabilities of the banking sector.

“The implementation of an appropriate policy mix will help preserve macroeconomic stability and, together with a better composition of public expenditures, will help restore fiscal space for priority capital and social spending. A prudent monetary policy will aim at containing inflation while safeguarding the stability of the banking sector. Greater exchange rate flexibility—coupled with structural reforms to improve the competitiveness of the economy—will contribute to improving Tunisia’s external position and rebuilding foreign reserve buffers.

“Furthermore, the SBA will support the implementation of the Tunisian authorities’ reform program to promote private investment, foster sustainable job-creation, reduce economic and social regional disparities, and strengthen social policies to protect the most vulnerable.

“These reforms are expected to help address many of Tunisia’s pressing economic and social challenges, and contribute to reducing risks that could arise from a worsening of the international economic environment or from protracted political uncertainty. These reforms deserve the support of the IMF and the international community through financial assistance, policy advice, and technical assistance.”