DAR ES SALAAM (Reuters) -Tanzania’s central bank lowered its benchmark interest rate by 25 basis points to 5.75% on Thursday, saying it expected inflation to remain stable below its medium-term target.
The Bank of Tanzania targets inflation of 5%, and consumer inflation has hovered around 3% since it launched its policy rate in January 2024.
The bank had left the rate unchanged at its four previous monetary policy meetings.
Governor Emmanuel Tutuba told a press conference that the bank’s projections showed inflation would remain below target, helped by the onset of the harvest season and exchange rate stability.
Tutuba said global risks had moderated on account of tariff negotiations between the U.S.
and its major trading partners and the Monetary Policy Committee was confident on the outlook for the third quarter.
The East African country’s government sees economic growth rising to 6% this year, from 5.5% last year, helped by the start of electricity generation at the Julius Nyerere hydropower dam.
President Samia Suluhu Hassan’s administration has been pushing ahead with large-scale infrastructure projects like the dam and a railway network ahead of elections due in October.
(Reporting by Nuzulack Dausen; Writing by Elias Biryabarema;Editing by Alexander Winning and Bernadette Baum)
