Falling dinar set to take toll on Tunis people

TUNIS/DUBAI, Aug 4 (Reuters): Weakness of Tunisia's dinar is undermining the purchasing power of its citizens and evoking memories of the country's economic crisis after its 2011 revolution. But this time, the dinar's depreciation may point to a stronger financial future.
For the past four months, the central bank has permitted a slide of the dinar against both the euro and the US dollar, ending a period of several months in which the bank intervened to keep the currency steady or even rising.
The depreciation carries economic and political risks as the country gears up for parliamentary elections in October and presidential polls in November - votes which it hopes will complete a sometimes violent transition to democracy.
But a cheaper currency could in the long run have big benefits for Tunisia, creating jobs by stimulating export industries, and making it more economical for foreign investors to put money into the country.
Slim Feriani, executive chairman at London-based Advance Emerging Capital, said the central bank seemed to have become more willing in recent months to let the dinar drop in response to Tunisia's trade deficit and low foreign exchange reserves.
He said the depreciation was moderate and controlled, and should be seen in the context of pragmatic economic policies being pushed by a technocratic cabinet appointed in January, such as cuts in petrol and food subsides.