Tunisian president calls for amendments to central bank law

By Tarek Amara

TUNIS (Reuters) - Tunisian President Kais Saied on Saturday called for the law governing the central bank to be amended, raising concerns the lender will lose its independence and of direct government intervention in monetary policy.

Saied said in a meeting with central bank Governor Zouhair Nouri that "it is time to change the 2016 law" that granted the bank power over monetary policy, reserves and gold.

"We want a national central bank, not as others wanted it based on dictates from abroad," he added, in a video published by the presidency.

In October, dozens of Tunisian lawmakers proposed a bill that would strip the central bank of its exclusivity over interest rates and foreign exchange policy, ending its independence.

The bank would only be able to take action in consultation with the government, but would be allowed to finance the treasury.

Saied told the governor there had been many complaints about high interest rates.

The central bank has kept rates on hold at 8% since 2023, warning of the risks of inflationary pressures, despite calls from the president for cuts.

Last year, Saied said the central bank should lend directly to the state treasury to avoid costly loans through private banks.

Following Saied's call, the parliament in December approved a law allowing the central bank to provide $2.2 billion to finance the 2025 budget and pay off urgent debts - the second time in less than a year that the government has resorted to the bank for funds.

The government is increasingly turning to domestic funding amid difficulties in securing Western finance since Saied seized nearly all power in 2021, ruling by decree, in a move the opposition has called a coup.

(Reporting by Tarek Amara; Editing by Sharon Singleton)