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Fitch May Slash Tunisian Ratings

Fitch Ratings said it may downgrade Tunisia's long-term foreign currency credit rating of BBB amid continued unrest in the North African nation.

Renewed disorder, with negative consequences for the economy, would lead to a downgrade, Fitch warned. However, the rating agency also said that if the political climate were to stabilize quickly an affirmation of the ratings was seen as likely.

Fitch ranks Tunisia's long-term foreign and local currency issuer default ratings at BBB and A-, respectively. Fitch's ratings are thus similar to the ratings given by Standard & Poor's BBB and Moody's Baa2.

Earlier, Fitch had expected a nearly 5% growth this year and the budget deficit to meet the government's target of 2.5% of GDP. However, due to the economic disruption, growth "will now be weaker than previously assumed," Fitch warned.

Security tightened and a state of emergency is in force in the Tunisian capital on Saturday after a 23-year dictatorship by the President Zine al-Abidine Ben Ali ended by massive street protests.

The 74-year-old leader had dethroned yesterday after weeks of protests in Tunis over rising unemployment, soaring food price and corruption. Dozens of people died as unrest has swept the country.

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