16.9 C
Saturday 10 December 2022
HomeNewsIMF to press Tunisia to restructure its external debt

IMF to press Tunisia to restructure its external debt

The International Monetary Fund (IMF) will sit down with Tunisia, Egypt and Sri Lanka at the IMF & World Bank Group Spring Meetings 2022 from April 18-24 to discuss steps that need to be taken to help them as tighter financial conditions raise the cost of debt servicing.

The good news is that we see debt, we follow it and we are already zeroing in on countries that are in need of debt restructuring,” IMF Managing Director Kristalina Georgieva said in an interview with Tom Keene on Bloomberg Television.

The IMF managing director did not, however, clearly articulate the needs of these countries, including Tunisia, for a debt overhaul, but she insists that the IMF must push for a debt restructuring.”

Sri Lanka and Tunisia are among the dozen or so emerging markets with dollar-denominated government bonds that pay at least 1,000 basis points more than U.S. Treasuries — above the threshold for debt to be considered distressed.

Nevertheless, according to U.S. news agency Bloomberg, Tunisia’s central bank may oppose any economic rescue deal that includes a restructuring of the country’s external debt.

Finance ministers and central bank governors from around the world are expected to meet in Washington next week for the IMF and World Bank spring meetings, which begin Monday.

The Tunisian delegation will be led by the Minister of Economy and Planning, Samir Saied, and the Governor of the Central Bank, Marouane El Abassi.

Kristalina Georgieva said that the invasion of Ukraine by Russia and its fallout, including uncertainty and inflation, prompt the IMF to lower the growth prospects for 2022 of 143 of its 190 member countries, which account for 86% of global GDP.

As for low-income countries, the multilateral lender’s helmswoman said they would need debt restructuring, while noting that 60% of them are over-indebted or close to it.


Please enter your comment!
Please enter your name here

- Advertisement -