BoT holds central bank rate at 5.75pc amidist global tensions

Dar es Salaam. The Bank of Tanzania (BoT) has maintained its Central Bank Rate (CBR) at 5.75 percent for the second quarter of 2026, the same level applied in the first quarter.

The decision was announced by Deputy Governor in charge of Monetary and Economic Policy, Dr Yamungu Kayandabila, during a briefing with banking leaders, financial institutions and media representatives on April 2, 2026 at BoT’s sub-offices here in the city.

The CBR serves as a key reference for BoT’s monetary operations, including lending to commercial banks.

It also influences interest rates across the banking sector, which are expected to stay within ±1.5 percent of the central rate from April onwards.

Dr Kayandabila said the move follows a thorough assessment of domestic and global economic conditions.

“The current rate is appropriate to keep inflation within the 3–5 percent target range,” he said.

“It will also help cushion the domestic economy from ongoing political conflicts in the Middle East, which have affected trade, investment, and global economic stability.”

The committee also reduced the permissible lending band from ±2 percent to ±1.5 percent, aiming to strengthen monetary policy effectiveness.

As a result, seven-day interbank lending rates will now range between 4.25 percent and 7.25 percent in the second quarter.

On domestic economic performance, Dr Kayandabila noted that despite global tensions, growth remains resilient.

In the first quarter, mainland Tanzania’s economy expanded by an estimated 6.2 percent, while Zanzibar recorded 6.7 percent.

The growth was driven by construction, agriculture, financial services, insurance, and tourism.

Separately, the Energy and Water Utilities Regulatory Authority (EWURA) announced on April 1, 2026, an upward adjustment in fuel prices.

The move has been attributed to rising international oil costs and global supply pressures linked to the Iran crisis.

Vice-Chairman of the Tanzania Bankers Association and Citi Bank CEO, Geofrey Mchangila, praised BoT’s steady management of the financial sector.

He noted that prudent oversight has reduced non-performing loans to 2.9 percent, maintained shilling stability against foreign currencies, and ensured a foreign reserve exceeding $6.2 billion, sufficient to cover imports for nearly five months.