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By Tarek Arama
TUNIS, May 15 (Reuters) - Tunisia will sell its first Islamic bond in September after months of delays, raising $140 million to boost dwindling currency reserves and help cover the budget deficit, its finance minister said on Thursday.
The sukuk has been delayed several times as a political crisis in the North African country stalled the adoption of an Islamic finance law by parliament.
“This time there will be no delay and we will issue a $140 million sukuk in September,” Hakim Ben Hammouda told Reuters on the sidelines of a finance ministry event.
The ministry had planned a $500 million sukuk and gave no reason for the reduction in size.
Tunisia’s foreign currency reserves fell this month to the equivalent of just 93 days of import cover, below the level the central bank considers adequate.
The government has since managed to secure more financing from international lenders and foreign partners as it tries to shore up an economy reliant on foreign tourism and remittances from overseas and damaged by its political crisis.
Tunisia will hold elections this year, three years after an uprising toppled long-time ruler Zine El-Abidine Ben Ali.
Prime Minister Mehdi Jomaa said on Wednesday that planned subsidy reforms and public spending cuts should help reduce the budget deficit by 1.5 billion dinars or $927 million in 2014.
Jomaa, whose caretaker administration is governing until elections, told reporters the budget financing needs were 3.5 billion Tunisian dinars or $2.16 billion through this year.
The government has said growth should reach 3 percent this year, on the basis of tourism figures plus forecasts for the wheat harvest and phosphate production, and that the budget deficit will be 7.5 to 8 percent of gross domestic product. (Editing by Patrick Markey and Catherine Evans)