Tunisia Holds Key Policy Rate at 7%

The Central Bank of Tunisia left its key interest rate unchanged at 7% at its July 29, 2026 meeting, citing persistent upside risks to the inflation outlook despite easing price pressures. Annual inflation slowed to 5.3% in June from 5.5% in May, as fresh food inflation eased to 11.2% from 13.2%, while core inflation remained at 5% for a third straight month, signaling persistent underlying pressures. The current account deficit widened to TND 4.24 billion, or 2.3% of GDP, in the first half of 2026 from TND 2.84 billion, or 1.6% of GDP, a year earlier, largely due to a record energy import bill. Net foreign exchange reserves stood at TND 23.4 billion, covering 92 days of imports after the repayment of a €700 million Eurobond. The Board reiterated that inflation risks remain tilted to the upside and stressed the need to continue supporting the disinflation process while preserving macroeconomic and external stability.

The Central Bank of Tunisia kept its key interest rate unchanged at 7% at its February 11, 2026 meeting, following a 50 bps cut in December. The decision reflects easing inflation and a cautious global backdrop, as major central banks maintained a pause amid trade and commodity price uncertainties. Annual inflation slowed to 4.8% in January, the lowest in six years, from 4.9% previously. The decline was driven by slower growth in regulated prices and a moderation in fresh food costs due to improved supply, while core inflation edged up to 4.9% on base effects linked to olive oil prices. Externally, the current account deficit widened to 2.5% of GDP in 2025 from 1.6% a year earlier, mainly due to a larger trade gap. Meanwhile, foreign reserves rose to 25.8 billion dinars, covering 109 days of imports, up from 102 days a year earlier. The Board reiterated its commitment to supporting disinflation and anchoring inflation expectations.

The Central Bank of Tunisia decided to slash the key interest rate by 50 basis points at its meeting held on December 30, 2025, bringing it down to 7%, effective January 7, 2026. This marked the second reduction this year, amid sluggish growth and slowing inflation. Policymakers noted that economic growth slowed to 2.4% in the third quarter of 2025 from 3.2% in the previous quarter, reflecting weaker performance in key sectors, particularly energy, as well as the textile, clothing, and leather industries. As for consumer prices, the disinflation process continued in recent months, albeit at a relatively slow pace. Inflation is seen at 5.4% this year compared to 7% in 2024. The rates on the 24-hour lending and deposit facilities will be adjusted accordingly to 8% and 6%, respectively, in order to ensure consistency of the interest rate corridor and the effective transmission of monetary policy to the market. The Board also decided to lower the minimum savings remuneration rate to 6%.