TUNIS (Reuters) - Tunisia, mired in political turmoil, is reviewing plans to tap international debt markets this year pending a rating upgrade, while a 2014 deadline for full convertibility of its dinar currency may also be put back.
After the ouster of president Zine Abidine Ben Ali,” we decided to review returning to international (debt) markets once things become clearer and after we return to (previous) rating levels,” Central Bank governor Mustafa Kamel Nabli told reporters on Friday.
Tunisia had planned to borrow around 3.8 billion dinars ($2.7 billion) in 2011 to cover the budget deficit and reimburse 2.3 billion dinars in public debt.
Nabli later told Reuters that a 2014 deadline the central bank had set for the full convertibility of the Tunisian dinar was challenging.
“It’s difficult, difficult. It could be delayed a bit.”
On Wednesday, Moody’s cut Tunisia credit rating to Baa3 and said it could lower it further. On January 14, Fitch put Tunisia’s long-term foreign currency credit rating of BBB on watch for a potential downgrade citing an upsurge of violence after Ben Ali fled the country.
Tunisia said in November it would return to international debt markets in early 2011 for the first time in two years to help the government raise public spending by 5 percent next year while keeping its budget deficit target almost unchanged from 2010.
Tunisia, a country of 10 million, relies heavily on tourism and manufacturing exports to European countries.
Tourism has ground to a halt after a popular uprising drove Ben Ali from power over poverty, corruption and political repression. The country has seen disorder since Ben Ali fled last week, but security has improved in recent days.
Nabli said the central bank would work to make sure banks keep credit lines open as the country gets back on its feet. A night curfew is still in place but schools and public institutions will reopen on Monday.
“We will encourage bank institutions to continue financing so that there is no economic setback for projects. One serious issue we fear is an interruption in financing,” he said. “Investment and exporting must return to their former levels.”
Nabli confirmed the central bank had frozen financial and property assets of Ben Ali’s family, without giving details.
Asked about the total value of frozen assets, he said: “They’re big and it’s difficult to quantify.”
He denied reports that the former ruler had taken with him gold from the public treasury when he fled to Saudi Arabia last Friday.
(Editing by Ron Askew, John Stonestreet)
Reporting by Tarek Amara, writing by Andrew Hammond