- Decision
- Raise
- Rate change
- 50 bps
- Policy rate after decision
- 6.25%
The Bank of Tanzania raised the Central Bank Rate (CBR) by 50 basis points to 6.25% for the quarter ending September 2026 to contain inflation pressures from higher global energy, fertilizer and transportation costs while supporting growth. The CBR had been held at 5.75% from the fourth quarter of 2025 through the second quarter of 2026. Mainland Tanzania’s annual inflation rose to 4.2% in May but remained within the 3-5% target range, while first-half real GDP growth was estimated at around 6% and private sector credit expanded by an average 24%. The current account deficit was estimated at 2.4% of GDP in the year ending June, while foreign exchange reserves hovered around USD 6 billion and covered 4.3 months of projected imports. The Middle East conflict weakened global activity, disrupted energy supplies and trade routes, and increased oil, fertilizer, freight and insurance costs. The Monetary Policy Committee expects moderate food inflation and strong export earnings to help keep inflation within target and will continue monitoring global and domestic developments.
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.