The Bank of Tanzania (BoT) has maintained the Central Bank Rate (CBR) at 6.25 percent for the quarter ending December 2026, with Governor Emmanuel M. Tutuba saying the current monetary policy stance remains appropriate to contain inflationary pressures while supporting economic growth.
Speaking today, Governor Tutuba says the decision was reached by the Monetary Policy Committee (MPC) during its meeting held on October 7, 2026.
“The Monetary Policy Committee considers the current restrictive monetary policy stance appropriate as it continues to filter through the economy, effectively dampening underlying inflationary pressures and fostering economic growth,” Governor Tutuba says.
Governor Tutuba says inflation is expected to remain within the medium-term target range of between three and five percent, while monetary policy will remain agile and flexible to address risks to the inflation outlook.
“The current monetary policy stance is appropriate to contain inflationary pressures while supporting economic growth,” Governor Tutuba says.
Governor Tutuba says government measures taken in response to the ongoing geopolitical conflicts in the Middle East and potential El Niño-related disruptions are sufficient to cushion the economy against external shocks.
“Government measures taken in response to the ongoing geopolitical conflicts in the Middle East and potential El Niño-related disruptions are sufficient to cushion the economy against external shocks,” Governor Tutuba says.
On the global economy, Governor Tutuba says the ongoing conflict in the Middle East is weighing on economic activity, disrupting energy and fertilizer supply chains and undermining efforts to reduce inflation.
“The ongoing conflict in the Middle East is weighing on economic activity, disrupting energy and fertilizer supply chains and undermining efforts to reduce inflation,” Governor Tutuba says.
Governor Tutuba says the International Monetary Fund (IMF) projects global economic growth at three percent in 2026, down from 3.5 percent in the previous year, while the World Bank forecasts growth of 2.5 percent, down from 2.9 percent.
“The global economic outlook remains subject to significant risks, particularly the scale and duration of geopolitical conflicts in the Middle East,” Governor Tutuba says.
Governor Tutuba says the global disinflation trend has stalled in most economies, largely due to high fuel prices, which at times have exceeded 100 US dollars per barrel.
“The global disinflation trend has stalled in most economies, largely due to high fuel prices,” Governor Tutuba says.
On the domestic economy, Governor Tutuba says Tanzania’s economic growth remains strong following the rebasing of the Gross Domestic Product (GDP) for Mainland Tanzania and Zanzibar.
“Mainland Tanzania’s nominal GDP for 2025 has increased to 234.104 trillion Tanzanian shillings, equivalent to 92.3 billion US dollars, from 230.073 trillion shillings under the previous series,” Governor Tutuba says.
“Zanzibar’s nominal GDP has also increased to 9.242 trillion shillings, equivalent to 3.6 billion US dollars, from 7.029 trillion shillings,” Governor Tutuba says.
Based on the revised GDP series, Governor Tutuba says Mainland Tanzania recorded six percent growth in the first quarter of 2026, with growth estimated to have exceeded six percent in the second and third quarters.
“The growth has been supported by financial services, industrial production, infrastructure investment and social services,” Governor Tutuba says.
Governor Tutuba says Zanzibar recorded 6.7 percent growth in the first quarter, while growth in the second and third quarters was estimated to have exceeded seven percent, driven by tourism, construction and irrigation projects.
“Zanzibar’s growth has been driven by tourism, construction and irrigation projects,” Governor Tutuba says.
Governor Tutuba says the growth outlook remains favourable despite risks arising from elevated global commodity prices, supply chain disruptions and possible El Niño-related effects.
“The growth outlook remains favourable despite risks arising from elevated global commodity prices, supply chain disruptions and possible El Niño-related effects,” Governor Tutuba says.
Governor Tutuba says inflation in Mainland Tanzania stood at 4.3 percent in August 2026, up from an average of 4.1 percent in the quarter ending June 2026, but remained within the medium-term target range of three to five percent.
“The increase in inflation has largely been attributed to higher global oil prices, which have pushed up domestic fuel prices and transport costs,” Governor Tutuba says.
“In Zanzibar, inflation has eased to 5.6 percent in August from six percent in July, but remains slightly above the medium-term target of five percent,” Governor Tutuba says.
Meanwhile, Governor Tutuba says credit to the private sector continues to grow strongly, averaging 32.5 percent in the quarter ending September 2026.
“Credit to the private sector continues to grow strongly,” Governor Tutuba says.
Governor Tutuba says the banking sector remains stable and resilient, supported by strong capital and liquidity positions as well as sustained profitability.
“The banking sector remains stable and resilient, supported by strong capital and liquidity positions as well as sustained profitability,” Governor Tutuba says.
Governor Tutuba says the ratio of non-performing loans stood at 2.5 percent in August 2026, well below the tolerable threshold of five percent.
“The ratio of non-performing loans remains well below the tolerable threshold of five percent,” Governor Tutuba says.
Governor Tutuba says the external sector also remains stable despite geopolitical pressures, with the current account deficit standing at 2.5 percent of GDP in the year ending September 2026.
“Stronger export performance, particularly in gold, tourism and manufactured goods, has helped cushion the impact of higher imports and freight costs,” Governor Tutuba says.
Governor Tutuba says foreign exchange reserves remain adequate at above six billion US dollars, with import cover reaching 4.3 months in September 2026, exceeding the national minimum requirement of four months.
“Foreign exchange reserves remain adequate, with import cover exceeding the national minimum requirement of four months,” Governor Tutuba says.
Governor Tutuba says fiscal policy continues to support economic growth, with tax revenue exceeding its target, prudent expenditure management and the fiscal deficit remaining below three percent of GDP.
“Fiscal policy continues to support economic growth through strong tax revenue performance, prudent expenditure management and a fiscal deficit that remains below three percent of GDP,” Governor Tutuba says.
Governor Tutuba says the next MPC meeting is scheduled for January 6, 2027, with the CBR decision for the first quarter of 2027 expected to be announced the following day.
“The next MPC meeting is scheduled for January 6, 2027, and the CBR decision for the first quarter of 2027 is expected to be announced the following day,” Governor Tutuba says.
Meanwhile, the Tanzania Bankers Association (TBA) has commended the Bank of Tanzania (BoT) for maintaining the Central Bank Rate at 6.25 percent, saying the decision will help strengthen economic stability and increase confidence in the country’s financial system.
TBA Acting Chairperson and Equity Bank Managing Director Isabela Maganga says the decision demonstrates the BoT’s commitment to ensuring that the economy remains stable at a time when the global economic environment continues to face uncertainty.
“In a world of uncertainty, the central bank has chosen stability. This is not merely a policy statement; it demonstrates confidence in and the resilience of our economy,” Maganga says.
Maganga says TBA and other financial sector stakeholders fully support the measures being taken by the BoT and are committed to working with the central bank to ensure that monetary policy measures translate into increased access to financial services, stronger banking sector growth and sustainable economic development.