Bank of Tanzania keeps rate at 6.25% for October–December quarter; August inflation at 4.3%

The Bank of Tanzania left its Central Bank Rate (CBR) at 6.25% for the quarter ending December 2026, according to a Monetary Policy Committee statement dated 8 October 2026 and signed by Governor Emmanuel M. Tutuba. The committee met on 7 October.

At its last policy meeting in July, the bank raised the rate by 50 basis points, Reuters reported on 8 October. The statement says the current rate should keep inflation under control and support economic growth.

Mainland inflation rose to 4.3% in August 2026, from an average of 4.1% in the quarter ending June, the statement says. That is still inside the national target range of 3% to 5%. The statement attributes most of the increase to higher world oil prices, which pushed up domestic energy prices and transport costs. In Zanzibar, inflation fell to 5.6% in August from 6% in July. That is above the 5.5% average of the quarter ending June and the medium-term target of 5% for the islands.

The committee said the Middle East conflict has disrupted world oil and fertiliser supply chains, and that oil has traded above US$100 a barrel in recent days.

On growth, the statement says the mainland economy grew 6.0% in the first quarter of 2026 and is estimated to have grown by more than 6% in the second and third quarters. It names financial services, industrial production, infrastructure investment and social services as the main drivers. Zanzibar grew 6.7% in the first quarter and is estimated at more than 7% in the second and third, led by tourism, construction and irrigation projects.

The growth figures use revised national accounts. The National Bureau of Statistics and the Office of the Chief Government Statistician in Zanzibar have rebased GDP, and for the mainland the base year moved from 2015 to 2019. Mainland GDP for 2025 is now TZS 234,104 billion (US$92.3 billion), against TZS 230,073 billion (US$90.7 billion) on the old base. Zanzibar's is TZS 9,242 billion (US$3.6 billion), up from TZS 7,029 billion (US$2.8 billion).

Private-sector credit grew by an average of 32.5% in the quarter ending September 2026, the statement says. Non-performing loans stood at 2.5% in August, below the 5% ceiling the bank treats as tolerable.

The current account deficit widened slightly to 2.5% of GDP in the year to September 2026, from 2.4% in the year to June. The bank says higher exports of gold, manufactured goods and tourism services partly offset the rising cost of imports and freight. Foreign exchange reserves were above US$6.0 billion, enough to cover 4.3 months of imports, against a national target of at least four months.

On the import side, The Citizen reported on 9 October, citing Bank of Tanzania data, that payments for imported goods and services reached US$21.27 billion in the year ending August, up from US$18.63 billion in the year ending February. The paper put the rise at US$2.6 billion.

According to The Citizen, petroleum imports rose from US$2.11 billion in the year ending February to US$3.43 billion in the year ending August, 51.7% more than the US$2.26 billion recorded in the same period of 2025. The paper said petroleum products accounted for about one-third of the increase in the goods import bill by August, and that the central bank had reported sustained demand for industrial supplies, machinery and transport equipment. Freight payments reached US$1.68 billion in the year ending August, up from US$1.30 billion a year earlier.

Severin Mushi, chairman of the Kariakoo Business Community, said freight charges had risen sharply. As quoted by The Citizen on 9 October, he said: "If someone was paying $2,000 before, you can now find that the same quantity costs $5,000, which is costly."

The next Monetary Policy Committee meeting is set for 6 January 2027, and the decision on the rate for the first quarter of 2027 will be announced the following day, according to the statement.