Tunisia gets surprise $500 million from Saudi amid IMF delay

Riyadh: Saudi Arabia offered Tunisia $500 million in financial aid that could buy time for the North African country as it struggles to secure a bailout from the International Monetary Fund.

The surprise announcement of a $400 million soft loan and a $100 million donation came during a visit to Tunis by Saudi Finance Minister Mohammed Aljadaan, state news agency TAP reported.

Tunisia intends to use the funds “to support the budget,” Tunisian Finance Minister Sihem Boughdiri said in remarks carried by TAP.

Tunisia’s dollar bonds jumped to their highest this year on the news.

The money comes at a sensitive time for Tunisia, which risks defaulting on its debt unless it wins final approval from the IMF for a $1.9-billion bailout agreed in principle last year.

The IMF has waited months for authorities in Tunisia to submit a revised package of reforms and spending cuts.

Tunisia’s coffers could also get some help from local lenders. Parliament will vote Friday on a $131 million loan from local banks to help fund the budget pending an IMF deal.

The Saudi aid comes after Tunisia’s top diplomat toured the Gulf earlier this week, meeting regional leaders and officials at sovereign wealth funds and economic development vehicles.