- Decision
- Maintain
- Rate change
- 0 bps
- central bank rate
- 6.25%
The Bank of Tanzania’s Monetary Policy Committee held the Central Bank Rate (CBR) at 6.25% for the quarter ending December 2026, judging the restrictive stance appropriate to contain underlying inflation while fostering growth and keep inflation within the 3%-5% medium-term target range. The CBR had been held at 5.75% in January and April before a 50-basis-point increase to 6.25% in July. Mainland Tanzania’s inflation rose to 4.3% in August, while economic growth was 6% in the first quarter and was estimated above 6% in each of the next two quarters, with private-sector credit expanding strongly and the banking sector remaining stable and resilient. The current account deficit was 2.5% of gross domestic product in the year ending September, while foreign exchange reserves remained above USD 6 billion and covered 4.3 months of imports. Globally, the Middle East conflict continued to disrupt energy and fertilizer supplies, weigh on growth and stall disinflation, although elevated gold prices supported foreign exchange earnings and reserve accumulation. The MPC said policy would remain agile and flexible and stood ready to respond if inflationary pressures became more persistent and broad-based.
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.
After keeping the CBR at 5.75% in April 2026 and narrowing the CBR corridor as Middle East tensions and the oil-price surge increased risks to inflation and growth, the Monetary Policy Committee (MPC) raised the CBR by 50 basis points to 6.25% on 2 July 2026 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. On 7 October 2026, the MPC held the CBR at 6.25% for the quarter ending December, judging the restrictive stance appropriate as it continued to filter through the economy and dampen underlying inflationary pressures, and projecting inflation to remain within the 3-5% target range, with government policies deemed sufficient to dampen inflation and foster growth amid the Middle East conflict and potential El Niño-related disruptions.