Cash in circulation across Tunisia has surged to an all-time high of 30 billion dinars ($10.5 billion), marking a sharp 16% year-on-year increase that is intensifying liquidity pressures on the country’s banking sector, according to data released Monday by the central bank.
As of August 21, banknotes and coins in public hands totaled 30.04 billion dinars, up from 25.9 billion dinars during the same period last year. The escalating reliance on physical currency signals that a growing portion of the money supply is being stashed outside formal bank accounts—a trend that analysts warn could constrain credit availability for households and businesses.
Financial experts attribute the cash surge largely to a controversial legislative overhaul introduced in 2024, which imposed stricter regulations on check usage and significantly hiked penalties for bounced or fraudulent checks. The legal shake-up has prompted merchants and individuals alike to revert to cash for settling transactions, exacerbating the strain on bank reserves and complicating monetary policy implementation.
Beyond regulatory changes, the persistence of Tunisia’s cash-driven economy reflects the sluggish rollout of digital payment infrastructure and online banking services, particularly in rural areas and smaller municipalities. Despite government efforts to modernize the financial ecosystem, a deep-seated public preference for cash continues to dominate daily commerce, further inflating the volume of currency circulating outside the banking system.
With liquidity management becoming increasingly challenging for lenders, the central bank now faces mounting pressure to absorb excess cash while safeguarding the stability of a financial sector already grappling with tight conditions. The record-breaking figures underscore a broader policy dilemma as authorities seek to balance payment modernisation with the unintended consequences of stricter cheque enforcement.
TunisianMonitorNews
