The Tunisian government is increasingly being criticized for making excessive demands on banks for short-term loans in the form of assimilated treasury bills (BTAs) and short-term treasury bills (BTCTs).
The data published on June 27 on the website of the Central Bank of Tunisia showed a steady increase in the value of these loans to 2,446.5 million dinars, compared with 1,926.7 million dinars in 2022. This increase was mainly due to the value of bank loans in the form of short-term Treasury bills, which rose by 112.5% to reach 8039.6 million dinars.
The State’s recourse to this type of short-term borrowing is explained in particular by its cruel need for liquidity to reduce the worsening budget deficit, to such an extent that on Monday June 26, 2023, the Treasury’s current account did not exceed 271 million dinars, compared with an unprecedented increase in cash circulating outside the banking system to 20107 million dinars.
In the same context, Central Bank data reveals that the volume of its refinancing of banks currently stands at 15306.5 million dinars compared with 9937.6 million dinars on June 26, 2022, in addition to the stability of the interest rate on the money market at less than 8%.
On the other hand, on 14 June 2023, the Tunisian Treasury managed to mobilize one billion dinars in response to a request to subscribe to short-term treasury patches to be paid within six months at an interest rate of 8.69%, according to data from “Tunisie Clearing” in its capacity as central depository.
The same data highlighted the mobilization of 130 million dinars by the State on 20 June 2023 in the form of short-term (26 weeks) Treasury patches, noting that 163.5 million dinars were mobilized on June 15, the day after the issue of Treasury patches payable over 13 weeks at an interest rate of around 8.4%.
A further 10 million dinars were raised in the form of commercial paper at 9.977% maturing in March 2031. Recourse to these operations was part of the search for funds to repay previous internal loans in the form of short-term commercial papers (13 and 26 weeks) with a maturity of two billion dinars, according to “Tunisie Clearing”, citing the General Directorate of Public Debt Management and Financial Cooperation under the Ministry of Finance.
Foreign currency loans …also
It should be noted that on 16 May 2023, the government signed an agreement with 12 local commercial banks to obtain a syndicated foreign currency loan of more than 400 million dinars, without disclosing the conditions for obtaining it, particularly in terms of repayment period and interest rate.
This loan is the seventh of its kind, the state having obtained the first one about five years ago.
This loan is considered to be one of the operations that could affect the banks’ foreign currency liquidity, in addition to the problem of the State’s excessive indebtedness to Tunisian banks.
On the other hand, the banks have been refusing for some time to reschedule the State’s long-term debt or the Treasury’s patches, which the authorities are constantly asking to reschedule and postpone until 2033.
Finally, it is worth noting that since the beginning of 2022, the Treasury has not paid any of the internal debts of Tunisian banks and financial institutions, in particular securities brokers, as all assessments have been scheduled and other payment deadlines have been postponed.
