Tunisia’s central bank governor said on Monday that its dinar currency could not be easily supported as the country’s foreign currency reserves fall below three months of imports. Marouan Abassi said cover had fallen to 84 days’ of imports due to lower phosphate production and a large energy sector deficit.
According to traders, the dinar hit a record low earlier this month against the euro as a worsening trade deficit and lower overseas remittances eroded reserves.
It was at 3.53 against the euro and 3.11 against the dollar on Monday.
The dinar fell about 13 percent versus the euro and 8.6 against the dollar in 2018. Tunisia's trade deficit widened in December 2018 to a record 19 billion dinars.
"Today, we have a huge energy deficit of up to five billion dinars and production fall in vital sectors such as phosphates, in addition to a decline in tourism revenues by half compared to 2010, for example," Abassi told parliament.
"What do we have to do If we defend the dinar, the stock of the currency will fall further", he added.
Production of phosphates, a major foreign revenue source, declined in 2018 to about 3 million tons compared to 8.2 million in 2010.
