Cash holdings in Tunisia have risen about 16% over the past year to a record 30 billion dinars ($10.5 billion), central bank data showed on Monday, as greater reliance on physical money puts pressure on banks’ liquidity.
Banknotes and coins in circulation reached 30.04 billion dinars as of August 21, up from 25.9 billion dinars a year earlier.
The increase means more money is being held outside bank accounts, potentially reducing the funds available to banks for lending to households and businesses.
Financial analysts said the rise has been partly driven by a law introduced last year that tightened rules governing the use of bank cheques and increased penalties for bounced or invalid cheques.
The changes have encouraged businesses and individuals to withdraw more cash for payments, adding to the amount of physical currency in circulation and making liquidity management more difficult for banks.
Cash also remains the preferred payment method for many Tunisians because electronic payments and digital banking have been adopted slowly, particularly outside major cities.
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