New Tunisian central bank law boosts independence and expands mandate

Tunisia's national assembly passed legislation on April 13 aimed at increasing the independence of the country's central bank and expanding its mandate to include maintaining financial stability.

The measures amend statutes from 1958 that have governed the bank since the country became independent of France. Article 2 now explicitly states the central bank is an independent institution.

It also specifies no-one can undermine the independence of the central bank or influence the decisions of its organs and its agents in the accomplishment of their missions.

Lawmakers in Tunisia's national assembly voted the law through with 73 in favour, five against and 25 abstaining. Despite the clear majority, local media reported the national assembly barely assembled a quorum of its 217 members to pass the draft law in its final vote.

The central bank's mission is considerably expanded in amendments to Article 8, setting out a number of detailed obligations to maintain financial stability.

Another amendment specifies the bank will act as the government's economic and financial counsellor. The law previously stated the bank's governor would only be consulted on matters concerning currency or credit.

While central bank governors are still nominated for a six-year term, the new law says that they can serve only two terms, whereas "several" terms were permitted previously. Current governor Chedly Ayari was appointed to his first six-year term in July 2012.

Articles 87-96 of the new law create a macro-prudential council, presided over by the central bank governor, and including representatives of Tunisia's finance ministry and three financial regulators.

The Central Bank of Tunisia (CBT) said it had drafted the amendments with technical assistance from the International Monetary Fund, while directors of the fund offered their support to the proposed law.

Tunisia is currently in receipt of a four-year Extended Fund Facility from the IMF, which the fund said in March 2016 was "expected to amount to about $2.8 billion".

The law aimed to "provide the CBT with greater autonomy" on "institutional, functional, personnel and financial matters", the central bank said in October. It would also better define the central bank's mandate "by adding the goal of contributing to financial stability to its primary objective of ensuring price stability", the statement added, while "improving its governance, transparency and accountability".