• Tunisia and Iraq central banks sign cooperation protocol to advance banking oversight and digital payments

• The agreement supports financial inclusion, cybersecurity, and alignment with international standards

• Tunisia aims to enhance banking sector stability amid inflation control and regulatory tightening

Tunisia and Iraq have signed a cooperation and coordination protocol between their central banks to strengthen institutional frameworks and promote financial integration. The agreement was concluded on the sidelines of the conference "Iraqi National Strategy for Financial Inclusion 2025–2029: Vision and Diagnosis", held in Baghdad.

The protocol was signed by Ali Mohsen Al-Alak, Governor of the Central Bank of Iraq, and Fathi Zuhair Al-Nouri, Governor of the Central Bank of Tunisia (BCT). It aims to improve collaboration in banking oversight, align risk management practices with international standards, and support the development and modernization of electronic payment systems to enhance financial inclusion. The agreement also provides for technical cooperation in monitoring payment systems, as well as the exchange of expertise in financial innovation, cybersecurity, and combating money laundering and terrorism financing.

Tunisia’s banking sector faces multiple challenges, including limited financial inclusion, the need to upgrade payment infrastructure, and compliance with international regulatory standards. The agreement with Iraq is part of a broader strategy to reinforce the resilience and operational capacity of the BCT.

Inflation in Tunisia has moderated significantly, falling to 5.6% in April 2025 after peaking at 10.4% in February 2023. The decline is attributed primarily to falling food prices. In response to these dynamics, the Central Bank of Tunisia has held its benchmark interest rate steady at 7.5% since March, maintaining a cautious monetary policy stance.

However, recent regulatory measures requiring increased capital buffers and enhanced risk management frameworks are placing financial pressure on commercial banks. While these changes aim to bolster sector stability, they also affect short-term profitability across the banking industry.