Tunisian President Kais Saied said he would not complywith the conditions imposed by the IMF, signaling that an agreed-upon bailout is unlikely to occur. The agreement required Tunisia to remove subsidies and hike interest rates, among other conditions.
Tunisia agreed to a $1.9 billion bailout with the IMF last October, but the deal still requires the approval of the lender’s board. Even if the bailout goes through, Tunisia’s economy would still be in dire straits, Al-Monitor reports. The country’s economic woes, including high inflation and soaring youth unemployment, have led to a flood of emigration.
The value of Tunisia’s bonds, which have traded in distressed territory for the past two years, plunged in the wake of the announcement. On Thursday, its dollar bonds fell to a record low of 51.38 cents on the dollar, Bloomberg reports, and its euro- and yen-denominated bonds also plummeted.