Fitch Revises Tunisia's Outlook to Negative; Affirms at 'B'
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Fitch Ratings has revised Tunisia's Outlook to Negative from Stable and affirmed the Long-Term Foreign-Currency Issuer Default Rating (IDR) at 'B'.
Fitch Ratings has revised Tunisia's Outlook to Negative from Stable and affirmed the Long-Term Foreign-Currency Issuer Default Rating (IDR) at 'B'.
Tunisian banks face a steep rise in credit losses over the next 12 months as borrowers' debt-servicing capacity weakens due to the recent ending of support measures put in place amid the coronavirus pandemic, Fitch Ratings says in a new report. Reduced profitability could pressure already-thin capital buffers, particularly at banks with weaker core profitability. Ratings could be downgraded for banks whose financial metrics deteriorate beyond our baseline expectations.
The resignation of Tunisia’s Prime Minister, Elyes Fakhfakh, on 15 July raises the risk of a renewed political deadlock that will further delay reforms and impede efforts to agree a new programme with the IMF, says Fitch Ratings. Although Tunisia faces limited immediate financing pressures, its funding position will become much more challenging in 2021 without the support that an IMF deal would provide.
Moody's Investors Service has placed the Government of Tunisia's B2 issuer ratings on review for downgrade.