Bank of Tanzania Holds Rate at 5.75% as Inflation Stays Within Target
TLDR
- The Bank of Tanzania (BoT) kept its benchmark interest rate steady at 5.75%, maintaining its policy stance after a 25-basis-point cut in July
- The central bank said the decision reflects expectations of stable prices and solid economic performance
- The BoT projects growth will surpass 6% in the coming quarters, supported by rising investment, stronger exports, and continued public spending
The Bank of Tanzania (BoT) kept its benchmark interest rate steady at 5.75%, maintaining its policy stance after a 25-basis-point cut in July, as inflation remains within the bank’s 3%–5% target range.
The central bank said the decision reflects expectations of stable prices and solid economic performance. Annual inflation stood at 3.4% in August, broadly consistent with the two-year average, while GDP grew 5.4% in Q1 2025, up from 5.2% a year earlier.
The BoT projects growth will surpass 6% in the coming quarters, supported by rising investment, stronger exports, and continued public spending. President Samia Suluhu Hassan’s administration is advancing large-scale infrastructure projects, including a hydropower plant and a national railway network, ahead of October’s general elections.
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Key Takeaways
Tanzania’s decision to hold its policy rate underscores the central bank’s confidence in its macroeconomic stability and growth trajectory amid subdued inflation pressures. The steady policy stance contrasts with several African peers tightening rates to curb currency weakness. Tanzania’s inflation has remained anchored despite higher energy and food prices, reflecting a combination of fiscal discipline, stable exchange rates, and moderate import costs. With growth driven by infrastructure investment, mining, and agriculture, the BoT appears focused on sustaining liquidity while preventing overheating ahead of elections. The outlook remains positive — inflation within range, GDP momentum above 5%, and external reserves supported by tourism and gold exports — positioning Tanzania among East Africa’s more stable post-pandemic economies.
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