Tunisia approves economic recovery and foreign exchange law

The Tunisian parliament on Monday approved an economic recovery law that allows people to open foreign currency accounts for the first time and also permits companies and individuals to agree a financial settlement for foreign exchange violations. The law, which had been stalled for years in the parliament, will allow firms to easily access loans and draw money from the black market as they struggle to cope with the North African country's worst economic crisis.

The Tunisian parliament on Monday approved an economic recovery law that allows people to open foreign currency accounts for the first time and also permits companies and individuals to agree a financial settlement for foreign exchange violations.

The law, which had been stalled for years in the parliament, will allow firms to easily access loans and draw money from the black market as they struggle to cope with the North African country's worst economic crisis. Tunisia saw its debt burden rise and economy shrink by 8.8% in 2020, with a fiscal deficit at 11.4% of output. Gross domestic product (GDP) shrank 3% in the first quarter of 2021 from a year ago.

The country started talks in May with the International Monetary Fund (IMF) on a financial assistance package. The law will reduce taxes for real estate investors and allow companies to settle foreign exchange violations by paying the fees due plus interest of 10%.

It will also reduce cash payments by adding a 5% charge, supporting a move to more to bank card transactions and online purchases. ($1 = 2.7504 Tunisian dinars) (Reporting b Tarek Amara; Editing by Sandra Maler and Jane Wardell)

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