Tanzania raises central bank rate to 6.25% amid market growth

Tanzania is experiencing significant shifts in its monetary policy and capital markets. The Bank of Tanzania has raised its Central Bank Rate to 6.25% from 5.75% in an effort to control inflation. While Deputy Finance Minister Laurent Luswetula defended the hike as a necessary measure to maintain economic stability, members of parliament have raised concerns that increased borrowing costs could hinder the implementation of the 2026/27 national budget and crowd out private sector credit.

Simultaneously, the country's capital markets have shown substantial growth. According to the Capital Markets and Securities Authority, Tanzania’s capital markets value grew 46.09% year-on-year to TZS 75.5 trillion in the quarter ending June 30, 2026. This growth was largely driven by domestic market capitalization, which rose 84.85% to TZS 23.7 trillion.

On the Dar es Salaam Stock Exchange, equity turnover saw a massive surge of 124.77% during the week of August 24 to August 28, 2026, reaching TZS 52.37 billion. Banking stocks continue to dominate market activity, with NMB Bank Plc and CRDB Bank Plc accounting for the vast majority of equity turnover. Despite these domestic gains, foreign investors have maintained a net selling position on the exchange.