Bank Liquidity Needs Increase in February 2025

Bank Liquidity Needs Increase in February 2025

The liquidity needs of banks rose in February 2025 to reach 13.001 billion dinars (Mtnd), up from 12.348 Mtnd the previous month. This increase is mainly due to the Treasury's increased recourse to domestic financing, particularly through short-term Treasury bill subscriptions totaling 1.523 Mtnd. However, this pressure was mitigated by several factors: the repayment of domestic debt in dinars (646 Mtnd), the return of banknotes and coins in circulation to the banking system (193 Mtnd), and the net sale of foreign currencies to the Central Bank of Tunisia (BCT) against dinars (61 Mtnd).

In parallel, the overall refinancing volume stood at 13.018 Mtnd on average, up from 12.410 Mtnd in January. This increase is driven by the growth in main refinancing operations (5.450 Mtnd vs. 4.748 Mtnd) and 6-month operations (2.228 Mtnd vs. 2.013 Mtnd). On the other hand, firm purchases of Treasury bills slightly decreased to 4.839 Mtnd, compared to 5.179 Mtnd the previous month. Meanwhile, 1-month refinancing continued to decline to 308 Mtnd, after 346 Mtnd in January.

The 24-hour facilities slightly decreased but remain at historically high levels. The marginal lending facility stood at 1.127 Mtnd, compared to 1.206 Mtnd in January 2025 and 961 Mtnd a year earlier. On the deposit facility side, it totaled 934 Mtnd in February, compared to 1.082 Mtnd the previous month and 773 Mtnd in February 2024.

Regarding interest rates, the Money Market Rate (TMM) remained stable at 7.99% for the seventh consecutive month, while the weighted average rate (TMP) of main refinancing operations slightly increased to 8.04%. Finally, the real interest rate continued to evolve in positive territory, reaching 2.3%, compared to 2% in January 2025 and 0.5% in February 2024.

In this context, and in light of the progress observed in the disinflation process, the BCT's Board of Directors decided, during its meeting on March 26, 2025, to reduce the key interest rate by 50 basis points, bringing it down to 7.50%.