Tanzania’s Central Bank, on Friday, set its main interest rate at 5.5 per cent in a bid to contain inflation within its target and boost economic growth.
The Bank of Tanzania had said earlier this month it would start using a benchmark interest rate to signal its monetary policy direction.
“The CBR (Central Bank Rate) considered the need to contain inflation within the medium-term target of five per cent.
”It is also to support economic growth to reach 5.5 per cent or more in 2024,” CB Governor, Emmanuel Tutuba, said at a press conference.
Inflation in the east African nation fell to three per cent in December from 3.2 per cent in November.
Tutuba said the bank’s Monetary Policy Committee’s decision also aims at ensuring the stability of the exchange rate.
He added that the new rate does not involve capping interest rates on facilities offered by other institutions.
“Interest rates of facilities offered by banks and financial institutions will still be market-determined,” he said.
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