- Decision
- Maintain
- Rate change
- 0 bps
- central bank rate
- 6%
The Monetary Policy Committee of the Bank of Tanzania kept the Central Bank Rate unchanged at 6% for the first quarter of 2025, judging the stance appropriate to preserve adequate liquidity, anchor inflation expectations below the 5% target, support projected Q1 GDP growth of about 5.7% and contain exchange-rate pressures. It will manage banking-system liquidity to keep inflation in line with the target and sustain economic activity. Mainland inflation stayed near 3% year on year in Q4 2024 and is seen at 3.1% in Q1, while GDP grew 5.4% in H1 2024 and is expected to reach 5.4% for the year before strengthening to around 6% in 2025; money supply and private-sector credit expanded by 14.8% and 16.8% respectively in Q4, with non-performing loans declining to 3.6%. Improved foreign-exchange earnings from tourism, gold and cash crops, alongside lower global rates, lifted reserves above USD 5.5 bn and narrowed the mainland current-account deficit to an estimated 2.7% of GDP in 2024, helping to mute currency pressures. The committee noted broadly stable global growth, easing inflation and softer commodity prices, though it flagged geopolitical tensions as a moderate risk, and will reassess its stance in early April 2025.
Rate evolution
From July 2025 to April 2026, the Bank of Tanzania cut the Central Bank Rate (CBR) by 25 basis points to 5.75% and then held it there for three meetings. The July easing reflected confidence that inflation would remain within the 3-5% target range, supported by prudent policies, harvest-related food supply and exchange rate stability, even as growth strengthened on infrastructure spending and private activity and external uncertainty from geopolitics and tariffs was judged to be moderating. The October 2025 and January 2026 holds cited the same mix of low inflation, strong growth, rapid private-sector credit, a sound banking system, stronger exports, foreign exchange liquidity and moderate oil prices as reasons to keep policy supportive.
By April 2026, however, the MPC had shifted to a more cautious risk balance, keeping the CBR at 5.75% and narrowing the CBR corridor as Middle East tensions and the oil-price surge increased risks to inflation and growth. On 2 July 2026, it raised the CBR by 50 basis points to 6.25% for the quarter ending September 2026 to contain inflation driven by higher global energy, fertilizer and transportation costs caused by the conflict. Although annual headline inflation in Mainland Tanzania rose to 4.2% in May from 3.2% in March, the MPC expected it to remain within the 3-5% target range, supported by adequate food supply from the 2025/26 harvests and limited exchange-rate pass-through amid high export earnings, while economic growth remained strong.