The Bank of Tanzania (BOT) released its Monthly Economic Review — March 2026, covering key macroeconomic indicators for the year ending February 2026, with data reflecting broadly stable inflation, strong export performance, robust credit growth, and resilient foreign exchange reserves.
Inflation
Headline inflation in Tanzania stood at 3.2% in February 2026, unchanged from the corresponding period in 2025 and slightly lower than the 3.3% recorded in January 2026.
The stability reflects a net effect of easing core and energy inflation offsetting seasonal pressures in food prices.
The rate remained within the national target and compliant with both the Southern African Development Community (SADC) and East African Community (EAC) regional benchmarks.
Core inflation, which excludes food and energy components, eased to 2.1% in February 2026, down from 2.2% in the corresponding month of 2025.
The deceleration was primarily driven by slower price increases in non-durable and semi-durable goods, particularly clothing, footwear, furnishings, and household equipment.
Core inflation remained the main driver of the headline rate, contributing 1.6 percentage points, slightly down from 1.7 percentage points in the previous month.
Food inflation stood at 5.7%, unchanged from the preceding month, though elevated compared to 5.0% in the corresponding period of 2025.
This reflects a balance between seasonal supply pressures and easing prices of key staples, including beans and finger millet.
Inflation for energy, fuel, and utilities fell sharply to 2.8% in February 2026, from 5.2% in January 2026, driven by the stabilization of charcoal and firewood prices and a downward trend in retail pump prices for petrol, diesel, and kerosene.
Food stocks held by the National Food Reserve Agency (NFRA) reached 560,007.9 tonnes in February 2026, down from 567,469.2 tonnes in the preceding month, following the release of 7,461.3 tonnes of maize and paddy to various traders, which helped stabilize retail staple prices.
Monetary Policy
The Monetary Policy Committee (MPC), at its meeting held in January 2026, kept the Central Bank Rate (CBR) at 5.75% for the quarter ending March 2026.
Monetary policy implementation in February 2026 focused on steering the 7-day interbank cash market (IBCM) rate within a ±2 percentage points range around the CBR.
The 7-day IBCM rate remained closely aligned with the CBR, maintaining adequate shilling liquidity in the banking system.
Extended broad money (M3) recorded annual growth of 24.5%, sustaining the momentum observed in January 2026.
The performance was primarily driven by the sustained expansion of credit to the private sector, which accelerated to 24.4% from 23.5% registered in the preceding month.
Mining and quarrying recorded the highest growth in private sector credit, expanding by 103.9%, underpinned by strategic government initiatives aimed at modernizing the extractive industry and enhancing financial inclusion for artisanal and small-scale miners through more flexible collateral requirements.
Other major contributors to credit growth included trade activity, which expanded by 48.7%, transport and communication at 39.4%, agriculture at 31.9%, and building and construction at 28.1%.
Credit to the manufacturing sector continued to contract, registering negative growth of 8.5% in February 2026, primarily attributed to net repayments of existing loan facilities.
Personal loans continued to represent the largest share of private sector credit at 35.4%, followed by trade at 14.7% and agriculture at 13.7%.
Interest Rates
Banks’ interest rates remained broadly stable in February 2026. The overall lending rate was virtually unchanged at 15.11%, compared with 15.10% in January 2026.
Negotiated lending rates for prime customers fell slightly to 12.19% from 12.25% in the previous month.
On the deposit side, the overall time-deposit rate was 8.32%, marginally down from 8.33% in January 2026, while negotiated deposit rates declined to 11.48% from 11.74%.
The short-term interest rate spread, measured as the difference between the one-year lending and deposit rates, narrowed to 5.59 percentage points from 5.79 percentage points in January 2026.
Financial Markets
Government Securities Market
The government securities market was characterized by persistent oversubscription, as stable macroeconomic conditions continued to drive robust investor appetite, particularly for longer-term maturities.
The BOT conducted two Treasury bill auctions during the month with a combined tender size of TZS 440.9 billion, attracting total bids of TZS 1,061.4 billion, of which TZS 431.1 billion were successful.
The overall weighted average yield (WAY) declined to 5.68% from 5.89% in the preceding month, reflecting sustained strong demand and liquid banking system conditions.
The BOT also conducted auctions for 15- and 25-year Treasury bonds, offering a combined tender size of TZS 399.5 billion, which attracted bids of TZS 2,778.1 billion, of which TZS 520.2 billion were accepted.
Weighted average yields to maturity for 15- and 25-year bonds declined to 10.78% and 11.99%, respectively.
Interbank Cash Market
The total value of interbank cash market (IBCM) transactions decreased to TZS 2,796.5 billion in February 2026 from TZS 2,868.9 billion in the preceding month.
Seven-day transactions dominated market activity, accounting for 63.5% of total volume, indicating a preference for short-term liquidity management.
The overall IBCM interest rate eased to 6.34% from 6.40% in January 2026, reflecting adequate liquidity within the banking system.
Interbank Foreign Exchange Market
Activity in the Interbank Foreign Exchange Market (IFEM) surged to USD 184.9 million in February 2026, from USD 88.2 million in the preceding month, supported by higher inflows from traditional crop exports and the mining sector.
The BOT recorded a net sale of USD 128.8 million, compared with USD 58 million in January 2026, to ensure orderly market conditions.
The Tanzanian shilling averaged TZS 2,570.24 per US dollar during the month, representing a moderate annual depreciation of 3.14% compared to TZS 2,492.05 in February 2025.
Government Budgetary Operations
Domestic revenue collections in January 2026 reached TZS 3,340.2 billion, surpassing the monthly target by 5.4%.
Central Government revenue amounted to TZS 3,156.4 billion, with the remainder sourced from local government collections.
Tax revenue reached TZS 2,762.3 billion, exceeding the monthly target by 7.1%, reflecting the continued positive effects of strengthened tax administration and improved compliance.
Non-tax revenue amounted to TZS 394.1 billion, representing 87.9% of the target.
Total government expenditure stood at TZS 3,751.7 billion, of which TZS 2,689.9 billion was recurrent expenditure and TZS 1,061.8 billion was allocated to development expenditure.
Debt Developments
National Debt
The national debt stock at the end of February 2026 was USD 51,112.8 million, a decrease of 0.2% from the preceding month, with external debt accounting for 70.2% of the total.
External Debt
The external debt stock declined by 0.1% to USD 35,859.1 million at the end of February 2026.
Of this amount, 82.7% was public debt and the remainder was private sector external debt.
External loans disbursed during the month amounted to USD 83.8 million, mainly to the central government.
External debt service payments totalled USD 98.9 million, of which USD 35.4 million was for principal repayments.
Multilateral institutions continued to account for the largest share of external debt at 57.8%, followed by commercial lenders at 35.7%.
The US dollar remained the dominant currency in the composition of external debt at 66.0%, followed by the Euro at 17.7%.
Domestic Debt
The stock of domestic debt stood at TZS 38,781.7 billion at the end of February 2026, a monthly increase of 0.5%.
The domestic debt portfolio remains concentrated in long-term instruments, particularly Treasury bonds, with commercial banks and pension funds holding 54.9% of the total.
The Government mobilized TZS 621.9 billion through the issuance of government securities in February 2026, of which TZS 450.5 billion was raised from Treasury bonds and TZS 171.4 billion from Treasury bills.
Domestic debt servicing during the month amounted to TZS 875.2 billion, including TZS 472.2 billion in principal repayments and TZS 403 billion in interest payments.
External Sector Performance
Current Account
The current account deficit narrowed to USD 2,108.2 million for the year ending February 2026, compared to a deficit of USD 2,156.3 million in the corresponding period of 2025, supported by improved exports of goods and services.
Exports
Exports of goods and services rose by 12.4% to USD 18,393.2 million in the year ending February 2026, from USD 16,365.5 million in the corresponding period of 2025.
Exports of goods grew by 15% to USD 10,872.9 million, driven primarily by gold, which accounted for 45.7% of total goods exports.
Gold exports rose sharply by 35.8% to USD 4,968.4 million from USD 3,658.9 million, reflecting favorable global prices.
Manufactured goods also recorded strong growth of 26.1% to USD 1,705.1 million, signaling a shift toward value-added production.
Traditional exports registered growth of 14.5% to USD 1,699.6 million, driven by tobacco, coffee, and cotton, benefiting from improved world market prices.
Services receipts increased by 8.8% to USD 7,520.3 million, primarily driven by tourism earnings, which were bolstered by a 4.2% increase in international tourist arrivals to 2,255,006 visitors.
Transport earnings, primarily freight, also strengthened to USD 2,726 million from USD 2,385.4 million in the year earlier.
Imports
Imports of goods and services rose to USD 18,634.2 million in the year ending February 2026, from USD 17,081.5 million in the corresponding period of 2025, driven by higher demand for productive inputs, including industrial supplies, transport equipment, and machinery.
Oil imports declined by 16.6% to USD 2,110.2 million from USD 2,529.7 million, largely reflecting softer global prices.
Foreign Exchange Reserves
Gross official reserves stood at USD 6,243.6 million in February 2026, sufficient to cover 4.8 months of projected imports of goods and services.
The reserve position remains comfortably above the national benchmark of 4.0 months and the EAC convergence criteria of 4.5 months, though slightly below the SADC benchmark of 6.0 months.
