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Tanzania increases interest rates to curb inflation

Tanzania's central bank raiseS its key interest rate to tackle rising inflation

Tanzania's central bank has raised its benchmark interest rate to 6% to proactively address potential inflationary risks from global economic conditions.

This move aims to safeguard the country's stable 3% inflation rate, which aligns with its target of under 5%. Governor of the apex bank, Emmanuel Tutuba emphasized that the proactive stance reflects the bank's commitment to prudent monetary policy and adequate food supplies.

Despite external pressures, Tanzania's economy remains robust and is projected to grow around 5.1% in the first quarter of 2024. Public investment in infrastructure and a favourable business environment is fueling this expansion.

"The performance is underpinned by public investment, particularly in infrastructure, as part of the measures to facilitate private sector business and investment," said Governor Emmanuel  Tutuba.

"Private sector investment also contributed to the estimated growth because of the improving business environment in the country", he added.

Tanzania's diverse economy, including tourism, mining, and agriculture, provides a strong foundation for continued growth.