Tunisia: Slight decline in aid to the economy of the financial system in the first quarter of 2021

Contributions to the economy of Tunisia’s financial system experienced a slight decline of 0.3% or 257 million dinars during the first quarter of the year 2021 against an increase of 1.2% or 1.084 billion dinars. year earlier, according to data from the Tunisian Central Bank of Tunisia (BCT).

This issuing institute mainly explains this situation by “ the decrease in credits to the economy (-0.7% or -655 million dinars against + 0.7% or +595 million dinars), the magnitude of which has was attenuated by the increase in the securities portfolio with the banks (7.5% or 398 million dinars against 10.3% or 489 million dinars) >>.

After consecutive decreases in January and February of 1.745 billion and 267 million respectively, aid to the economy resumed an upward trend in March (+ 1.755 billion) mainly reflecting, according to the BCT, the increase in the portfolio discounted from banks (976 million against -385 million).

In particular, the credits granted to professionals during the first quarter of 2021, showed a decrease of 346 million dinars against + 2.097 billion dinars during the same period of the year 2020. Credits benefiting the industry sector and agriculture and fishing increased by 247 million dinars and 86 million dinars respectively, while the service sector experienced a decrease of 639 million dinars.

As for loans granted to individuals, they have increased by 308 million dinars.

Regarding the resources of the financial system and their counterparts, the BCT notes that during the first quarter of 2021, the M3 money supply (all coins and banknotes in circulation, deposits in passbooks, short-term loans and various monetary investments), was showed a slight deceleration compared to the same period of the past year (0.4% against 2.1%). << This evolution is explained by the combined effect of the decline in aid to the economy and the fall in net claims on the outside (-1.413 billion dinars against 773 million) while the net claims on the State grew at an accelerated pace (13.8% vs. 4.8%).

As for the resources of the resident financial system, the evolution of the M3 money supply during the first quarter of the year 2021 is attributable, essentially, to the slowdown in the rate of growth of fiat money (1.1% against 6.9 %) and quasi-monetary availability (0.3% against 1%) which was coupled with the fall in bank money (-0.1% against 2.2%). However, underlines the BCT, these developments reflect reallocations within each currency aggregate.

In fact, specifies the issuing institution, the deceleration (0.4% against 3.9%) in the rate of growth of the money supply within the meaning of M1 (all coins and banknotes in circulation as well as deposits at sight domiciled with banks) originates above all in that of banknotes and coins in circulation (1% or +160 million compared to 6.2% or 831 million), combined with the fall in the outstanding demand deposits with banks (-0.9% or -217 million against 5.2% or +1.002 billion).

Regarding quasi-monetary deposits, they increased during the period under review at a slower rate than that recorded during the first quarter of 2020 (0.3% or 135 million against 1% or 497 million) under the effect of the continued decline in the outstanding amount of certificates of deposit (-7.4% or -310 million against -8.5% or -354 million), the simultaneous slowdown in the growth rates of term deposits and other financial products (0.2% or 26 million against 3.5% or 530 million) and special savings accounts (1.4% or 299 million against 1.8% or 342 million).

 

According to the services of the BCT, the decline in certificates of deposits is explained in particular by the non-renewal of securities that have expired.

 

With regard to the counterparties of the financial system, the data from the BCT indicate that the net claims on the outside experienced a significant decrease during the first quarter of the year 2021 (-1.413 billion against +773 million) reflecting, mainly, the fall in foreign assets (-1.258 billion against +634 million) and to a lesser extent the increase in the external commitments of the financial system (+678 million against +36 million) impregnated by the decline in the volume of resources. During the first quarter of 2021, the mobilization of resources mainly concerned the credit contracted with AFD in favor of the Tunisian Treasury of 100 million euros.

 

Net foreign currency assets closed the first quarter of 2021 at a level of 21.841 billion dinars, or the equivalent of 152 days of importation against 23.099 billion dinars and 162 days, respectively, at the end of December 2020.

 

As for net claims on the State, they increased in the first quarter of 2021 at an accelerated pace (13.8% or 3.837 billion against 4.8% or 1.121 billion in the first quarter of 2020). This essentially reflects, according to the services of the BCT, the recovery of the outstanding amount of Treasury bills held by local banks (+1.094 billion against -356 million) and the restrictive effect of the fall in the Treasury current account. (-2.674 billion against 498 million) following the increase in current Treasury expenditure. As for Treasury bills purchased by the BCT as part of Open Market Operations, they experienced a decline of 175 million dinars against 991 million dinars.

The issuance of treasury bills recorded during the first quarter of the period under review, an increase to stand at 1.949 billion, 94% of which in the form of equivalent treasury bills against repayments in this respect amounting to 868 million. (i.e. net subscriptions of +1.081 billion compared to 2.008 billion, 1.028 billion and +980 million, respectively, in March 2020).

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