Tanzania’s central bank kept its benchmark interest rate unchanged at 5.75 percent, saying the decision was aimed at supporting continued economic expansion as inflation remains contained.
The Bank of Tanzania said the move, taken at its latest Monetary Policy Committee meeting, reflected confidence in the country’s economic outlook and price stability.
“The Monetary Policy Committee expects economic conditions to be favourable, and therefore keeping the policy rate unchanged would support robust economic growth,” the central bank said in a statement.
It added that inflation was projected to remain within the bank’s target range of three to five percent, allowing policymakers to maintain an accommodative stance.
The decision marked the second consecutive meeting at which the central bank has left the key rate unchanged, underscoring a cautious but supportive approach as Tanzania seeks to sustain momentum in growth while monitoring global and domestic risks.
Tanzania’s economy has shown resilience in recent years, supported by public investment, improved agricultural output and steady growth in sectors such as construction, transport and tourism.
Government-led infrastructure projects, including roads, ports and energy developments, have played a central role in supporting activity, while private sector credit has gradually recovered.
Inflation in Tanzania has remained relatively moderate compared with some regional peers, aided by stable food prices and subdued energy costs. The central bank said this trend was expected to continue in the near term, providing room to prioritise growth.
The Bank of Tanzania has kept monetary policy broadly supportive since the pandemic, aiming to stimulate lending while safeguarding financial stability.
However, policymakers have also cautioned that Tanzania remains exposed to external shocks, including fluctuations in global commodity prices, tightening financial conditions in major economies and climate-related risks.
The central bank said it would continue to monitor developments in the global economy, particularly movements in oil prices, exchange rates and international interest rates, which could affect domestic inflation and growth prospects.
Tanzania’s shilling has remained relatively stable in recent months, helping to limit imported inflation and support investor confidence.
Analysts say the decision to hold rates reflects a balancing act between encouraging investment and consumption while ensuring inflation expectations remain anchored.
With inflation projected to stay within target, maintaining the policy rate at current levels could help lower borrowing costs for businesses and households, supporting credit growth and economic activity.
The government has set ambitious growth targets as part of its medium-term development agenda, which focuses on industrialisation, infrastructure expansion and job creation.
Officials have repeatedly emphasised the need for coordinated fiscal and monetary policies to sustain growth while preserving macroeconomic stability.
Tanzania’s economy is also benefiting from a gradual recovery in tourism, one of its key foreign exchange earners, as international travel continues to rebound.
At the same time, authorities are seeking to attract more foreign direct investment, particularly in mining, manufacturing and energy, sectors seen as critical to long-term growth.
The central bank said future policy decisions would remain data-dependent and guided by developments in inflation, growth and financial market conditions.
While global uncertainty remains elevated, the bank said Tanzania’s economic fundamentals were strong enough to support continued expansion.
The next monetary policy meeting is expected later in the year, when policymakers will reassess the outlook amid evolving domestic and international conditions.
For now, the decision to keep rates unchanged signals confidence that Tanzania can maintain steady growth without reigniting inflationary pressures, even as central banks in many parts of the world continue to navigate a complex and uncertain economic environment.
