Dar es Salaam. The Bank of Tanzania (BoT) has decided to maintain the Central Bank Rate (CBR) at six percent for the first quarter of 2025.
This decision, made by the Monetary Policy Committee (MPC) on January 7, 2025, aims to ensure adequate liquidity in the economy, stabilize inflation below the five percent target, and support projected economic growth of approximately 5.7 percent.
Revealing this on Wednesday, January 8, the BoT Governor, Mr Emmanuel Tutuba, emphasized the importance of this decision.
“By keeping the CBR unchanged, we are not only fostering economic growth but also ensuring that inflation expectations remain anchored, which is crucial for the well-being of our economy.”
In its assessment, the MPC noted favorable global economic conditions, with reports from the International Monetary Fund (IMF) and World Bank indicating stability in growth and a decline in inflation across many economies.
This positive environment is expected to benefit Tanzania, aided by increased household consumption and supportive fiscal policies.
The economic performance in 2024 was strong, with both Mainland Tanzania and Zanzibar showing robust growth driven by sectors such as agriculture, transport, construction, and trade.
Projections for 2025 suggest continued strength, with Mainland Tanzania expected to grow around 6 percent and Zanzibar approximately 6.8 percent.
Inflation has remained stable, well below the target, thanks to adequate food supply and moderate global commodity prices.
The MPC anticipates inflation to remain low in early 2025, supported by a stable exchange rate and reliable power supply.
Additionally, foreign exchange liquidity has significantly improved, driven by increased earnings from key exports like tourism and gold.
The Governor expressed confidence in the effectiveness of the Bank’s monetary policy:
“The implementation of our monetary policy, alongside sustained foreign exchange earnings, has allowed us to stabilize our currency and keep exchange rate pressures muted.”
The MPC plans to reconvene in early April 2025 to reassess economic conditions and determine the appropriate policy rate for the second quarter, demonstrating the Bank’s commitment to maintaining a resilient and sustainable economy.
