Dar es Salaam. As Tanzania navigates through 2025, the outlook for the Tanzanian Shilling remains optimistic, bolstered by a combination of favorable economic conditions and prudent monetary policies.
The Bank of Tanzania (BoT)’s Monetary Policy Committee (MPC) statement highlights expectations for continued stability in the exchange rate, fueled by projected economic growth and ongoing global improvements.
The MPC anticipates that both Mainland Tanzania and Zanzibar will maintain strong growth trajectories, with estimates of around 6 percent and 6.8 percent, respectively.
This growth is expected to be supported by key sectors such as agriculture, transport, and tourism, which will enhance export capacities and further strengthen the shilling.
In 2024, Tanzania demonstrated robust economic performance, with GDP growth around 5.7 percent, attributed to effective fiscal and monetary policies.
This foundation of stability is crucial as Tanzania progresses through 2025, providing confidence in the currency’s value and helping to reduce volatility in the foreign exchange market.
Taking the case of the USD, for-instance, the Tanzanian Shilling has made a remarkable rebound against that currency.
As of today, January 8, the average exchange rate stands at Sh2,401.3 to the US dollar, marking a substantial recovery from Sh2,517.3 at the beginning of last year.
The Governor of BoT, Mr Emmanuel Tutuba, on Wednesday, January 8, 2025, emphasized the importance of maintaining a stable exchange rate:
“With continued growth and effective policies, we expect the Tanzanian Shilling to remain resilient, limiting inflationary pressures and supporting overall economic confidence.”
Looking back at 2024, the exchange rate was positively influenced by a significant improvement in foreign exchange liquidity.
This was driven by rising export revenues from key sectors such as tourism and agriculture, leading to a healthier current account balance.
The current account deficit narrowed to an estimated 2.7 percent of GDP, down from 3.7 percent in 2023, indicating a stronger external position that supports the shilling.
Moreover, the MPC’s decision to keep the Central Bank Rate (CBR) steady at six percent helped maintain adequate liquidity in the economy, curbing speculative pressures in the foreign exchange market.
The emphasis on using the shilling for domestic transactions further reduced unnecessary demand for foreign currency.
As 2025 unfolds, the BoT will continue to closely monitor exchange rate developments, ensuring that the monetary policy remains aligned with economic realities.
The MPC is committed to fostering an environment where the shilling can thrive, providing stability and resilience for the Tanzanian economy.
With projections for continued global economic improvement and strong domestic growth, the Tanzanian Shilling is positioned to remain a stable currency, enhancing confidence among investors and consumers alike as the nation moves forward.
