The Bank of Tanzania (BoT) has retained the Central Bank Rate (CBR) at 5.75 percent for the quarter ending December 2025, citing stable inflation and strong economic prospects that continue to support both monetary and fiscal stability.
Governor Emmanuel Tutuba, announcing the Monetary Policy Committee’s (MPC) decision made on October 1, said the benchmark rate would be maintained as inflation remains within the 3–5 percent target range.
“The MPC decision reflects confidence in the resilience of the economy and is supported by positive assessments from global rating agencies, Moody’s and Fitch Ratings,” he said.
In line with the stance, the BoT will ensure the 7-day interbank rate remains within a 2 percent corridor of the CBR.
Tutuba noted that liquidity conditions in the banking system had improved, resulting in interbank rates trending close to the policy rate during most of the period.
Mainland Tanzania’s inflation stood at 3.4 percent in August 2025, while Zanzibar’s eased to 4.0 percent from 4.2 percent—both comfortably within the convergence criteria for the East African Community (EAC) and Southern African Development Community (SADC).
“We expect inflation to remain stable, supported by prudent policies, steady food supplies, exchange rate stability, reliable electricity, and moderate oil prices,” Tutuba explained.
Economic activity is also on an upward trajectory. Mainland GDP expanded by 5.4 percent in the first quarter of 2025, up from 5.2 percent in the same period in 2024.
Strong performance was recorded in mining, agriculture, financial services, construction, and manufacturing. Growth above 6 percent is projected for the remainder of the year, boosted by investment flows and export performance.
Zanzibar’s economy grew by 6.4 percent in the first quarter, with full-year growth forecast at 7.3 percent, led by tourism, construction, and agriculture.
Private sector credit expanded at about 16 percent, pushing money supply growth to 20.4 percent compared with 19.1 percent in the previous quarter.
The banking sector remained resilient, with non-performing loans falling to 3.3 percent in August, well below the 5 percent benchmark.
On external accounts, Tanzania’s current account deficit narrowed sharply to 2.4 percent of GDP in the year ending September 2025, down from 3.8 percent a year earlier, largely due to improved export receipts from traditional crops, tourism, and gold.
Zanzibar posted a current account surplus of USD 685.6 million, compared with USD 499 million in 2024, boosted by service exports, particularly tourism.
The shilling strengthened, appreciating by 8.4 percent against the US dollar, supported by improved foreign exchange liquidity, which was further bolstered by high gold prices, seasonal tourism peaks, and cash crop harvests.
Foreign reserves stood at around USD 6.4 billion, enough to cover more than five months of projected imports—comfortably above the EAC benchmark of 4.5 months.
Fiscal performance was also strong, with domestic revenues exceeding targets on the back of improved tax collections.
Expenditure was kept in line with available resources, and new public borrowing was largely directed toward strategic infrastructure projects.
The next CBR review will follow the MPC meeting scheduled for January 7, 2026.
