The central bank of Tanzania lowers the policy rate due to stable inflation

Tanzania’s central bank said it expects inflation to stay below its medium-term target, lowering its benchmark interest rate (TZINTR=ECI) by 25 basis points to 5.75% on Thursday.

Since launching its policy rate in January 2024, consumer inflation (TZCPIY=ECI), which the Bank of Tanzania targets at 5%, has been hovering around 3%.

At its four prior monetary policy sessions, the bank had maintained the rate at its current level.

At a press conference, Governor Emmanuel Tutuba stated that the bank’s forecasts indicated that the start of the harvest season and stable exchange rates would assist keep inflation below goal.

According to Tutuba, the Monetary Policy Committee was optimistic about the outlook for the third quarter and that global concerns have subsided as a result of tariff talks between the United States and its main trade partners.

The start of electricity generation at the Julius Nyerere hydroelectric dam is helping the East African nation’s economy develop by 6% this year, up from 5.5% last year, according to the government.

Ahead of the October elections, the administration of President Samia Suluhu Hassan has been moving forward with major infrastructure projects like the dam and a railway network.