Will Qatar's $500 million loan help Tunisia solve its economic woes?
Reuters reported Saturday that Qatar National Bank has given the government of Tunisia $500 million to support its foreign currency reserves.
The Qatari sovereign wealth fund made the deposit to the north African country in response to growing pressure on Tunisia from the World Bank and the International Monetary Fund (IMF) to cut its budget deficit and end the political turmoil enveloping the country. The Qatari money will help Tunisia's Islamist-led government tighten its deficit and help grain-shippers use foreign currency to pay for imports.
Tunisia is expected to pay back the loan to Qatar over five years with an interest rate that will remain between 2.5 and 3 percent.
Qatar has been a financial supporter to Islamist-led governments that have come to power as a result of the Arab Spring, previously giving similar donations to Egypt under former Islamist president Mohamed Morsi. However, Qatar has stopped deposits to Cairo as a result of disputes between the new government and Doha.
- Need some space? UAE's banking sector is getting too crowded
- Bank funding in the Middle East doesn't boil down to liquidity alone
- Why is the Israeli shekel so weak?
- What doesn't kill you, makes your stronger: why the Arab Bank is likely to emerge from the Israeli lawsuit 'unscathed with flying colors'
- Too foreign? An inside look into the struggles of foreign banks in Saudi Arabia