By Alfred Zacharia
Tanzania
central bank has held its benchmark interest rate at 5.75%, saying stable
inflation and resilient domestic growth justify maintaining an accommodative
policy stance as the country enters 2026.
This was
revealed by Bank of Tanzania (BoT)’s Governor, Mr. Emmanuel Tutuba today,
saying that the inflation is expected to remain within the official target
range of 3–5 percent, supporting continued economic expansion.
“The Monetary
Policy Committee (MPC) expects economic conditions to remain favourable, and
therefore keeping the CBR unchanged will continue to support robust economic
growth,” he briefed media outlets in Dar es Salaam.
The
decision, according to him, is also aimed at maintaining stability in
short-term money markets, with the seven-day interbank rate guided to remain
between 3.75% and 7.75%.
Tanzania’s
economy grew by an estimated 5.9% in 2025, close to the government’s 6% target,
driven mainly by agriculture, mining and construction.
Growth on
the mainland is projected at around 6% in the first quarter of 2026, while
Zanzibar’s economy is expected to expand by 7.2%, supported by tourism,
construction and manufacturing.
Inflation
remained subdued toward the end of 2025, averaging 3.5% on the mainland and
3.4% in Zanzibar.
Mr. Tutuba
said prudent monetary policy, alongside easing global inflation pressures,
helped maintain price stability and ease exchange rate volatility.
The
banking sector welcomed the policy decision, saying it has supported growth
despite global economic challenges.
“The Bank
of Tanzania has managed monetary policy well, maintaining a favourable stance
that continues to support GDP growth,” said Herman Kasekende, Chairman of
the Tanzania Bankers Association.
Kasekende
noted that the country’s external sector has been a key driver of growth,
supported by high gold prices, tourism earnings and agricultural exports.
Stable global oil prices have also helped reduce pressure on the import bill,
he said.
Tanzania’s
external position has strengthened, with the current account deficit narrowing
to 2.2% of GDP from previous highs of 4–5%, while foreign exchange reserves
rose above $6.3 billion, enough to cover almost five months of imports.
“The
stable shilling has reinforced confidence among businesses and households,”
Kasekende added.
Credit to
the private sector grew by 20.3% in 2025, while non-performing loans remained
low at 3.1%, well below the regulatory ceiling of 5%, reflecting a sound and
resilient banking system.
The govonor
also highlighted that supportive global conditions, including easing inflation
and steady commodity prices, have helped maintain macroeconomic stability,
enabling Tanzania to navigate geopolitical tensions, trade tariffs and supply
chain disruptions without significant disruption to growth.
Looking
ahead, the central bank said it will continue monitoring economic developments
and maintain policy flexibility to support price stability and sustainable
growth.
The next
MPC meeting is scheduled for April 2, with the policy decision expected the
following day.