The World Bank will suspend talks over its future engagement with Tunisia following the country's president's anti-immigrant comments, according to an internal message to staff seen by AFP.
"Given the situation, management has decided to pause the Country Partnership Framework and withdraw it from Board review," said the bank's outgoing President David Malpass in the note to staff.
In the message sent on Sunday evening, Malpass said President Saied's tirade triggered "racially motivated harassment and even violence," and that the World Bank postponed a scheduled 21 March meeting involving Tunisia until further notice.
However, ongoing projects will continue and funded projects remain financed, according to AFP.
The World Bank will roll out additional safety measures for its staff on the ground, and may take more action if needed, Malpass added.
Last month, President Kais Saied ordered officials to take "urgent measures" to tackle irregular migration, claiming that "a criminal plot" was underway to change Tunisia's demographic makeup.
Saied claimed that migrants were behind most crime in the North African country, fueling a spate of sackings, evictions and attacks. He did not support his claims with evidence.
Over the past two weeks, hundreds of migrants have flown home from Tunisia, fearful of a wave of violence and discrimination against the community.
"Public commentary that stokes discrimination, aggression, and racist violence is completely unacceptable," said Malpass in the note to World Bank staff.
But, the World Bank also noted that measures announced by the Tunisian government to protect and support migrants and refugees, describing them as a "positive step" and that the bank would assess and monitor its impact carefully.
Over the weekend, the Tunisian Presidency office announced new measures "in favour" of students and migrants from sub-Saharan Africa, as it blamed the racism wave on unspecified sources.
Saied on Monday issued a video showing him reminding Interior Minister Taoufic Charfeddine of the importance of upholding rights and freedoms. The foreign ministry also held a news conference to again reject accusations of widespread racism in Tunisia.
The African Union has previously expressed "deep shock and concern" at Saied's remarks, and governments in sub-Saharan Africa have scrambled to bring home hundreds of frightened nationals who flocked to their embassies for help.
The US and the UN said Monday they are "deeply concerned" by President Saied's remarks, in separate press briefings.
Since the president's speech on 21 February, rights groups reported a spike in vigilante violence, including stabbings targeting African migrants.
Police subsequently detained hundreds of migrants, landlords summarily evicted hundreds from their homes and hundreds of others were fired from work, according to the Tunisian Forum for Economic and Social Rights (FTDES).
According to official figures, there are around 21,000 undocumented Sub-Saharan African migrants in Tunisia, home to around 12 million people.
Many Sub-Saharan African migrants in the country lost their jobs and homes overnight, after "Kais Saied greenlighted discrimination" against the community, Ziad Al-Rouine from Mnemty Association against Racism in Tunisia said to The New Arab.
The embassies of Ivory Coast and Mali earlier provided emergency accommodation for dozens of their citizens evicted from their homes, including young children.
Meanwhile, citizens of other African countries whose countries have no diplomatic representation in Tunisia set up makeshift camps outside the Tunis offices of the International Organisation for Migration.
The World Bank has been a major donor to Tunisia, helping it finance food imports and business development as the cash-strapped country seeks an International Monetary Fund bailout.