MONETARY decision makers have decided to leave the central bank rate (CBR), the lending rate offered to banks and other financial institutions, unchanged at 6.0 percent for the quarter ending December 2024.

Emmanuel Tutuba, the Bank of Tanzania (BoT) governor, said at a briefing here yesterday that the monetary policy committee (MPS) had finalised monetary policy directions for the fiscal 2023/2024 third and fourth quarter.

The stay was decided on projections indicating that inflation will remain low, aligning with the maximum level of 5.0 percent.

The MPC anticipates steady growth in line with improving domestic and global conditions, he said, pointing at global estimates varying from a global growth rate of 3.2 percent or much lower at 2.6 percent.

“This growth is expected to stimulate domestic economic activities," he said, pointing at declining inflation tied with lagged effects of tight monetary policy and decreasing commodity prices, particularly for crude oil and fertilizers.

Most central banks in the region are expected to cut or maintain policy rates, he said, aware that central banks in the SADC and EAC zones had recently affirmed this position.

He said that commodity prices in the world market have been generally stable and are projected to remain at similar levels, with crude oil prices projected at $72 and $82 per barrel for December 2024 futures, driven by an increase in supply.

This will reduce pressure on inflation and demand for foreign exchange, with petroleum products accounting for about 20 percent of the total import bill, he stated.

Assessing monetary policy conduct in the quarter ending September 2024, he said it successfully anchored inflation expectations well within the 5.0 percent range. Economic growth stood at 5.6 percent with construction, agriculture, financials and insurance plus transportation contributing the most, he said, affirming a 5.8 percent and 5.6 percent growth rate projection in the second and third quarters of fiscal 2024/2025.

Projected growth is bolstered by improvements in global and domestic economic conditions, where domestic conditions uplift is tied to improving the business environment, supported by the development partners.

Agricultural output is expected to increase significantly due to wider use of inputs like fertilizers and quality seeds and pesticides, plus investment in irrigation schemes, he said, noting that construction and transportation are also expected to add to the growth momentum.

The Zanzibar economy grew by 6.4 percent during the quarter ending September, driven by transport, financials and insurance, plus construction.  Inflation remained stable, within the regional convergence target framework, he stated.

Headline inflation stood at 3.0 and 3.1 percent in July and August 2024 respectively, and is projected to stay within 3.2 percent range in the fourth quarter of calendar 2024.

The stability of consumer goods prices in the world market, adequate food supply, stable power supply as well as prudent monetary and fiscal policies are expected to contain inflationary pressures, he added.