The Bank of Tanzania (BOT) Monthly Economic Review for September 2026, covering the year ending August 2026, shows exports of goods and services rising 16.4% to USD 20,216.2 million, led by gold, while the current account deficit widened on higher import costs.
Headline inflation rose to 4.3% in August 2026, remaining within the national target of 3% to 5%.
Credit to the private sector expanded 33%, up from 31.2% the previous month.
Gross official reserves stood at USD 5,888.2 million, covering 4.2 months of projected imports.
The Central Bank Rate (CBR) was held at 6.25% following the July 2026 increase.
The Shilling depreciated 6.7% year-on-year, averaging TZS 2,657.01 per USD.
Table of Contents
Inflation
Headline annual inflation rose to 4.3% in August 2026, from 4.2% in July 2026 and 3.4% in August 2025.
The uptick was driven mainly by the lagged pass-through of earlier fuel price increases to bus, taxi and motorcycle taxi fares, with inflation remaining within the East African Community (EAC) and Southern African Development Community (SADC) convergence benchmarks.
Core inflation, which excludes unprocessed food, energy and utilities, rose to 4.1% from 3.9% in July 2026 and 2.0% in August 2025.
Core inflation contributed 3.1 percentage points to headline inflation, up from 1.5 percentage points a year earlier.
Food inflation eased to 3.7% from 4.1% the previous month and 7.7% in August 2025, reflecting improved supply of staples such as maize, rice and beans.
Energy, fuel and utilities inflation rose to 8.5%, the highest level since October 2024, driven mainly by higher charcoal and firewood prices.
National Food Reserve Agency (NFRA) stocks stood at 484,332 tonnes at the end of August 2026, after the Agency purchased 3,757.5 tonnes and released 2,813.7 tonnes of maize and paddy to traders.
Monetary Policy
The Monetary Policy Committee (MPC) raised the Central Bank Rate (CBR) to 6.25% in July 2026 to contain emerging second-round inflationary pressures from higher energy, fertiliser and transport costs.
Monetary operations were calibrated to keep the 7-day interbank cash market rate within the policy corridor of 4.75% to 7.75%.
Extended broad money supply (M3) grew 25.5% in the year ending August 2026, moderating from 26.9% the previous month.
Credit to the private sector expanded 33%, up from 31.2% in July 2026, reflecting expanding economic activity.
Transport and communication recorded the highest sectoral credit growth at 77.2%, followed by mining and quarrying at 75.9%, trade at 47.1%, building and construction at 41.8% and agriculture at 38.4%.
Personal loans, most of which support micro, small and medium-sized enterprises, remained the largest component of banks’ credit at 34.1%, followed by trade and agriculture.
Interest Rates
The overall lending rate eased slightly to 15.05% in August 2026, from 15.10% in July 2026.
Negotiated lending rates for prime borrowers declined to 11.93% from 12.04%.
The overall time deposit rate was unchanged at 8.78%, while the negotiated deposit rate rose to 11.06% from 10.99%.
The spread between the up-to-one-year lending rate and the 12-month deposit rate narrowed to 5.95 percentage points from 6.20 percentage points.
Financial Markets
Government Securities
The Bank conducted two Treasury bill auctions with a combined tender size of TZS 580 billion.
The auctions attracted bids worth TZS 981.7 billion, a bid-to-cover ratio of 1.7, of which TZS 520.8 billion was accepted.
The overall weighted average yield on Treasury bills rose to 4.86% from 4.74% in July 2026.
The 15-year and 25-year Treasury bonds, with a combined tender of TZS 621.5 billion, attracted bids of TZS 2,136.3 billion, a bid-to-cover ratio of 3.4, of which TZS 595.4 billion was accepted.
The yield on the 25-year bond declined to 11.48% from 11.89%, while the 15-year bond yield edged up to 10.55% from 10.39%.
Interbank Cash Market
Interbank cash market turnover declined to TZS 4,566.2 billion in August 2026, from TZS 5,627 billion in July 2026.
The 7-day segment accounted for 47.8% of total transactions.
The overall interbank cash market rate averaged 6.67%, up from 6.57% the previous month.
Interbank Foreign Exchange Market
Total transactions in the Interbank Foreign Exchange Market (IFEM) amounted to USD 190.3 million, compared with USD 227.1 million the previous month.
The Bank sold a net USD 45.4 million to ease volatility in the foreign exchange market.
The Shilling averaged TZS 2,657.01 per USD, against TZS 2,653.52 per USD in July 2026, and depreciated 6.7% year-on-year, a swing that largely reflects a base effect from the sharp appreciation recorded in August 2025.
Government Budgetary Operations
In June 2026, government revenue collections exceeded the monthly target by 5.4%, reaching TZS 4,658.2 billion.
Central government revenue reached TZS 4,512.1 billion, representing 96.9% of the total.
Tax revenue reached TZS 3,733.2 billion, 12.5% above the monthly target, supported by improvements in tax administration and compliance.
Non-tax revenue stood at TZS 778.9 billion, below the target of TZS 953.8 billion.
Total expenditure reached TZS 4,720.1 billion, comprising TZS 2,797.9 billion in recurrent spending and TZS 1,922.2 billion in development spending.
Debt Developments
The national debt stock increased 1.7% month on month to USD 52,224.4 million at the end of August 2026, with external debt accounting for 70.3%.
External Debt
External debt stock (public and private) stood at USD 36,731.5 million, up 0.8% from July 2026, with public debt accounting for 83.7%.
External loan disbursements totalled USD 160.1 million during the month, mainly to the central government.
External debt service payments were USD 139.1 million, of which USD 69.2 million was principal repayment.
Multilateral institutions remained the largest creditor category at 59.5%, followed by commercial lenders, while the US Dollar dominated the currency composition at 64.9%, followed by the Euro.
Domestic Debt
Domestic debt rose 3.6% to TZS 40,899.5 billion at the end of August 2026, driven mainly by the issuance of Treasury bonds.
The Government raised TZS 632.5 billion through securities, comprising TZS 178.1 billion in Treasury bills and TZS 454.4 billion in Treasury bonds.
Domestic debt service totalled TZS 633.4 billion, including TZS 163.5 billion in principal and TZS 469.9 billion in interest.
External Sector Performance
Current Account
The current account deficit widened 45.9% to USD 2,481.8 million in the year ending August 2026, from USD 1,700.9 million a year earlier.
The widening reflected import growth that outpaced export gains, driven by higher costs of petroleum products and intermediate inputs.
Exports
Exports of goods and services increased 16.4% to USD 20,216.2 million in the year ending August 2026.
Goods exports rose 19.8% to USD 11,960.8 million, from USD 9,981.2 million a year earlier.
Gold exports increased 30.2% to USD 5,625.0 million, from USD 4,321.5 million, on higher global prices and volumes, contributing nearly two-thirds of the overall rise in goods exports.
Manufactured goods exports rose 44.3% to USD 2,213.4 million, from USD 1,533.9 million, mainly on higher exports of iron and steel products and glassware.
Among traditional exports, tobacco reached USD 570.2 million, tea USD 99.4 million and cotton USD 96.5 million.
Service receipts increased 11.7% to USD 8,255.4 million, mainly backed by transport and travel receipts.
Transport receipts rose 26.4% to USD 3,303.3 million from USD 2,612.5 million, underpinned by freight earnings from transit trade.
Travel receipts increased 1.7% to USD 4,389.7 million from USD 4,314.7 million, reflecting continued resilience in tourism.
Imports
Imports of goods and services increased 21.4% to USD 21,269.2 million in the year ending August 2026.
The increase was largely attributable to intermediate and capital goods, with petroleum products accounting for a substantial share.
Imports of petroleum products rose 51.7% to USD 3,425.6 million, from USD 2,257.4 million.
Service payments increased 9.4% to USD 3,498.2 million, from USD 3,196.2 million, driven largely by higher freight payments, which rose 29.5% to USD 1,683.4 million from USD 1,300.4 million.
The primary income deficit narrowed 7.7% to USD 1,870.2 million from USD 2,026.5 million, while the secondary income surplus declined 6.5% to USD 441.4 million from USD 472.2 million.
Foreign Exchange Reserves
Gross official reserves stood at USD 5,888.2 million at the end of August 2026, supported by export earnings and the Bank’s gold purchase programme.
This covers 4.2 months of projected imports, above the national adequacy benchmark.
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