UPDATE 1-Tunisia says has no intention of requesting foreign debt rescheduling

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TUNIS, May 19 (Reuters) - Tunisia’s financial situation is critical, but the government has no intention of requesting a rescheduling of its foreign debt, Finance Minister Ali Kooli said in Wednesday.

Tunisia, which has seen its debt burden rise and economy shrink by 8.8%, with the fiscal deficit at 11.4%, started talks with the International Monetary Fund to seek a package of financial assistance.

Kooli told local Mosaique FM radio that negotiations were also under way with other potential lenders, including Qatar, to help finance the state budget.

A sovereign default in Tunisia - though highly unlikely in the next 12 months - could cost the country’s banks up to $7.9 billion, S&P Global Ratings said last week.

Tunisia’s 2021 budget forecasts borrowing needs at $7.2 billion, including about $5 billion in foreign loans. It puts debt repayments due this year at $5.8 billion including $1 billion in July and August. ($1 = 2.7192 Tunisian dinars) (Reporting By Tarek Amara; Editing by Kevin Liffey and Alex Richardson)