TUNIS — Tunisian Central Bank Gov. Marwan al-Abbasi acknowledged publicly for the first time at a hearing held May 13 by the parliamentary commission on general legislation that the banking sector is facing a liquidity crisis.

Abbasi warned in statements May 13 carried by Radio Shams FM that the year 2019 will be difficult for Tunisian banks amid the dry-up of liquidity. He noted that this crisis could push banks to refrain from meeting all of their loan demands compared to 2017 and 2018 when liquidity was available.

Director General of Monetary Policy at the Central Bank of Tunisia Rim Kalsi told Al-Monitor, “Liquidity shortage in Tunisia is undeniable, with the overall volume of refinancing carried out periodically by the Central Bank reaching about 16 million dinars (about $5.3 million) in 2019, up from an estimated 14.5 million dinars ($4.8 million) in 2018 and 6.5 million dinars ($2.2 million) in 2016.”

Kalsi linked the liquidity crisis to an increase in the trade balance deficit in Tunisia, which reached 19 million dinars ($6.3 million) in 2018 compared to 15 million dinars ($5 million) in 2017. “Exports dropped and imports increased. Inflation stood at 6.9% at the end of April 2019, which led to pressure on liquidity,” she said.