On Thursday, April 4, 2024, the Bank of Tanzania (BOT) announced an increase in the central bank rate (CBR) from 5.5% to 6.0 % as an outcome of a meeting of the Monetary Policy Committee, held on 3rd April 2024.
The Tanzania Central Bank Governor, Emmanuel Tutuba, mentioned in a statement released by the BOT that the decision was made based on a macroeconomic forecast that was carried out in March 2024, which required an increase in the scope of monetary policy actions to limit the effect of inflation caused by global economic development.
The new rate will take effect in the second quarter of 2024, from April to June.
In 2023, Tanzania experienced economic growth which has been estimated to be 5.1% from 4.7% in the preceding year.
In the first quarter of 2024, the economy also grew by about 5.1% and was supported by public investment, particularly in infrastructure, which aimed to stimulate private sector businesses and assets.
Tanzania’s GDP boosted by more than 6% in 2023, with tourism playing a significant factor,. It is expected to continue in 2024 due to improved businesses, sufficient rain, and the global economic recovery.
The inflation rate in Tanzania is low and stable, on average, at 3% annually, which aligns with the target of less than 5% and the convergence criteria of the regional economic bloc in which Tanzania was a member. This stability is due to prudent monetary policy and adequate food supply.
According to the statement, By implementing monetary policy in the first quarter of 2024, the 7-day interbank interest rate was successfully kept within the desired range of 3.5 to 7.5 percent. As in the previous quarter, private sector loan growth averaged 17%, which was still quite strong.
Most of the credit ventured to mining, transportation, industry, and agriculture. Because of the strengthening business and investment climate, there would be a considerable demand
for financing.
