- Decision
- Maintain
- Rate change
- 0 bps
- central bank rate
- 5.75%
The Monetary Policy Committee (MPC) of the Bank of Tanzania kept the Central Bank Rate (CBR) at 5.75 percent for the October-December 2025 quarter, judging that headline inflation will stay within the 3–5 percent target and that economic activity remains strong. After a 25 bp cut in July that lowered the CBR from 6.00 percent, the central bank will continue to guide the 7-day interbank rate within a corridor of ±2 percentage points around the policy rate, noting that previous liquidity operations have already kept the rate near target. Annual inflation was 3.4 percent in mainland Tanzania and 4.0 percent in Zanzibar in August, with projections pointing to continued stability, while mainland GDP grew 5.4 percent in Q1 and is expected to exceed 6 percent in subsequent quarters; private-sector credit is expanding by about 16 percent. Externally, the current-account deficit narrowed to 2.4 percent of GDP, the shilling appreciated 8.4 percent against the USD, and foreign-exchange reserves stood at USD 6.7 billion, covering more than five months of imports. The MPC highlighted resilient but slightly slower global growth, softer oil prices around USD 68 per barrel and declining inflation that has led many central banks to hold or ease rates, and it pledged to keep market rates aligned with the CBR ahead of the next policy announcement on 8 January 2026.
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.