- Decision
- Maintain
- Rate change
- 0 bps
- Central bank rate
- 5.75%
The Bank of Tanzania’s Monetary Policy Committee maintained the Central Bank Rate (CBR) at 5.75% for the first quarter of 2026, judging that inflation is projected to stay within the 3–5% target range and that an unchanged stance would support robust growth; over the past year, the MPC held the CBR at 6.00% in early 2025 before cutting 25bp to 5.75% in July and keeping it unchanged in October 2025. The Bank said it will implement policy so the 7-day interbank rate evolves within a 3.75–7.75% band. Domestically, inflation remained low, averaging 3.5% in Mainland Tanzania in the fourth quarter of 2025, while GDP growth in 2025 was assessed as robust at around 5.9% and projected to remain strong at 6% in the first quarter of 2026; the banking sector was described as sound, with non-performing loans at 3.1%. Externally, the current account deficit narrowed to a five-year low of 2.2% of GDP in 2025, foreign-currency liquidity was adequate and reserves exceeded USD 6.3bn, sufficient for about 4.9 months of imports. The MPC cited a resilient global economy amid elevated tariffs and geopolitical conflicts, with low and declining global inflation aided by lower energy prices, alongside crude oil prices at USD 62–65 per barrel in late 2025 and record-high gold prices supporting foreign-exchange earnings.
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.