Tunisian bonds dropped sharply after President Kais Saied rejected a bailout package from the International Monetary Fund (IMF). The nation’s dollar bonds due 2025 fell 4.1 cents to 51.38 cents on the dollar, the lowest recorded level. The country’s Euro and Yen bonds also plummeted.
President Saied called IMF bailout plans “diktats” that would only worsen the economic situation in Tunisia. He cited bread riots that occurred four decades ago, triggered by a similar agreement with the IMF, as an example of what could happen if Tunisian citizens reject external intervention.The cash-strapped country is currently in negotiations with its powerful trade union, UGTT, over spending cuts to subsidies and public sector employment. Without an agreement with the IMF, Tunisia could default on its debt, deepening its social and economic crisis and resulting in more people fleeing their homeland due to hardship.
The US Secretary of State Antony Blinken has warned that “the economy risks falling off the deep end” without an IMF bailout. This sentiment has been echoed by members of the US House of Representatives who have called for US foreign aid to Tunisia to support “inclusive, democratic governance and rule of law”.
President Saied defended his actions on Thursday afternoon, saying he is only enforcing laws in order to protect Tunisia from chaos. When asked about his re-election bid for 2024 he said that he won’t let an “unpatriotic” successor take over and ultimately left it up to Tunisian citizens as “the referee”.
