Central Bank Rate Tanzania Held at 6.25%: What Q4 2026 Means for Borrowers

The central bank rate Tanzania businesses watch is a signal, not a loan price. It steers the rate at which banks lend to each other for seven days. Loans, overdrafts and deposits follow it with a lag, and only as far as each contract allows.

What changed on 8 October 2026

Nothing moved, and that is the news. The Monetary Policy Committee (MPC) of the Bank of Tanzania (BoT) met on 7 October 2026. The next day the Governor released MPC Statement No. 245, in Kiswahili. It reads: "Kiwango cha Riba ya Benki Kuu (CBR) kubaki asilimia 6.25 kwa robo mwaka inayoishia Desemba 2026." The CBR stays at 6.25% for the quarter ending December 2026.

The statement is listed on the BoT press releases page. We read it and checked it against The Respondents and the Daily News, both of 9 October, and Reuters, republished by CNBC Africa on 8 October.

The committee said the 6.25% rate is still working through the economy, dampening inflation while supporting growth. It warned that policy could change if fuel prices linked to the Middle East conflict, or El Niño rains, push prices up.

Who is affected

• Companies and SMEs with shilling loans, overdrafts or leases, on the Mainland and in Zanzibar.
• Importers financing stock or trade in shillings or dollars.
• Treasury bill, bond and deposit holders comparing returns on cash.
• Foreign shareholders pricing a loan into a Tanzanian subsidiary.

The decision changes no contract by itself. It changes the cost of money between banks, and what banks bring to their next pricing review.

How has the CBR moved since January 2024?

The BoT introduced the CBR in January 2024. Its statement of 19 January 2024 marked a "transition from monetary targeting to an interest rate (or price)-based monetary policy framework". The table lists only decisions we could read in a BoT statement or a dated independent report.

Sources: The Star; the BoT statement of 4 April 2025; the BoT Monetary Policy Statement 2026/27; Reuters via Polity; and the BoT statement of 3 July 2026, also reported by TanzaniaInvest.

Why did the Bank of Tanzania hold the rate?

The October statement relies on these figures:

• Mainland inflation: 4.3% in August 2026, up from a 4.1% average in the quarter to June, inside the 3% to 5% target.
• Zanzibar inflation: 5.6% in August, down from 6% in July but above the 5% target.
• Growth: 6.0% on the Mainland and 6.7% in Zanzibar in the first quarter of 2026.
• Credit and reserves: private sector credit up an average of 32.5% in the quarter to September; reserves above USD 6 billion, or 4.3 months of imports.

Strong credit growth and imported price pressure argue against a cut. Inflation inside the target argues against a further rise. The hold sits between the two. Since the decision, the National Bureau of Statistics' CPI 2026 page has shown Mainland inflation at 4.3% for September 2026.

What does the CBR band mean for interbank rates?

The CBR is a target, not a rate anyone pays. The BoT steers the seven-day interbank rate, at which banks lend shillings to each other, to stay close to it.

In January 2024 the band was plus or minus 200 basis points. The April 2026 statement narrowed it to plus or minus 1.5 percentage points, giving a range of 4.25% to 7.25% around the 5.75% CBR then in force.

Neither the July nor the October statement mentions the corridor. If 1.5 points still applies, the range this quarter is 4.75% to 7.75% on Zatra's arithmetic. A narrower band means interbank rates, and so bank funding costs, track the CBR more closely.

Will bank loan and overdraft rates change?

Not automatically. The CBR binds no commercial bank's loan rate. Each loan follows its contract.

The gap between the CBR and business borrowing is wide. The June 2026 Monetary Policy Statement reports an overall lending rate of 15.33% in April 2026 and a negotiated rate of 12.56% for prime borrowers. The BoT notes that transmission "to longer-term interest rates remained relatively weak".

The July rise is the more likely trigger for repricing letters this quarter. Ask each bank whether your rate was reviewed after July, and on what basis. Check the method as well as the rate; our guide to flat rate versus reducing balance loans shows why. Phone borrowers should first check the lender's licence against our list of licensed loan apps.

What about USD loans and loans from abroad?

The CBR is a shilling rate. Dollar loans are priced off dollar funding costs and the bank's margin. A dollar borrower is affected mainly through the exchange rate: if the shilling weakens, each instalment costs more shillings.

Foreign parents often fund a subsidiary with a shareholder loan, which should carry arm's length interest. See lending to a Tanzanian company from abroad, shareholder loan versus equity and the BoT foreign exchange rules for companies.

What does it mean for treasury bills, bonds and deposits?

Government securities are sold at auction, so yields respond to the CBR and to liquidity. The June 2026 statement reports these April 2026 figures, before the July rise.

Use the latest BoT auction results for a current comparison; our guide on how to buy treasury bonds explains the process. The fee register records withholding tax on interest at 10% under Cap. 332, First Schedule para 4(b)(ii) (F0208). Interest on DSE-listed corporate or municipal bonds is outside withholding (F0209). How withholding applies depends on the investor and the instrument.

What it means for SMEs, importers and leasing

SMEs. Most SME loans are priced well above the CBR, so a hold changes little at once. What matters is whether the bank repriced after July. A business negotiating a new facility this quarter faces no fresh policy rise.

Importers. Importers carry two costs: trade finance interest and the exchange rate. Reserves above USD 6 billion bear on dollar availability, not on any bank's rate. See paying a foreign supplier.

Leasing and microfinance. Finance lease companies are BoT-licensed, with minimum tier 1 capital of TZS 1,000,000,000 (F0556), and their rates tend to follow bank funding costs. Non-deposit-taking lenders apply to the BoT as Tier 2 providers, at TZS 500,000 for an entity (F0558) or TZS 300,000 for an individual money lender (F0559).

How does the CBR apply in Zanzibar?

Section 2 of the Bank of Tanzania Act, 2006 reads: "This Act shall apply to Mainland Tanzania as well as to Tanzania Zanzibar." Section 5(1) makes the BoT responsible for monetary policy. The CBR applies to banks in Zanzibar as on the Mainland. What differs is the price data.

A group with companies on both sides models one CBR but two price paths. See Union and non-Union taxes and running a group across the Mainland and Zanzibar.

Which tax figures move with BoT rates?

Interest on late tax is charged at the "statutory rate", compounded monthly, under the Tax Administration Act, Cap. 438 s.87 (NEW-02-08). The register records that rate for the third quarter of 2026 as 8.75%, the BoT rediscount rate (NEW-02-09). The fourth quarter figure is not in the register, so confirm it with TRA. Withholding on local interest is covered in our withholding tax on local payments guide.

Worked example: repricing a TZS 200 million SME loan

This worked example uses assumed figures. It is not a forecast of any bank's action.

Assumptions. A Dar es Salaam distributor owes TZS 200,000,000 on a variable-rate loan, with 36 monthly instalments left on a reducing balance. The rate is 16.0%. The bank passes on July's 0.5-point rise from November, to 16.5%.

• Instalment at 16.0%: TZS 7,031,407; at 16.5%: TZS 7,080,877.
• Increase: TZS 49,470 a month, or TZS 1,780,916 over 36 months.
• First month's interest: TZS 2,666,667 against TZS 2,750,000.

Overdraft. An average balance of TZS 50,000,000 for 30 days costs TZS 698,630 at 17.0% and TZS 719,178 at 17.5%.

Deposit. TZS 50,000,000 for 12 months at 9.81% earns TZS 4,905,000. Withholding at 10% (F0208) is TZS 490,500, leaving TZS 4,414,500.

The October hold adds nothing to these figures. If the MPC moves in January 2027, the same arithmetic applies.

When does a loan question need an advocate?

A repricing letter is commercial until it is disputed. A rate change the contract does not allow, a demand, a call on the loan, or a move to sell collateral or enforce a mortgage or guarantee needs legal advice. Disputes, enforcement on security and formal legal opinions go to an advocate. Our guide to debt recovery before litigation covers the early stages.

What to do now

1. List every facility. Record each loan, overdraft and lease with its rate, basis and review date.
2. Read the repricing clause. Note the reference rate and the notice the bank must give.
3. Ask about July. Confirm whether the July 2026 rise has been passed on, and from when.
4. Rerun the cash flow. Model 2027 instalments at the current rate and 0.5 points higher.
5. Compare cash returns net of tax. Set the latest auction results against deposit offers after withholding (F0208).
6. Diarise January. Note the MPC meeting on 6 January 2027.

Key dates

How Zatra helps

Zatra's financial modelling and forecasting service builds rate scenarios into budgets and loan schedules. Our outsourced CFO service reviews bank facilities, and the tax advisory service covers withholding and tax arrears. Finance & Tax Control runs USD 3,600 to 4,800 a year; a Senior Advisory Session costs USD 49. See our pricing page.

Government fees are paid to the authority at the official rate against a GePG control number, separately from Zatra's professional fee. Zatra presents facts and models scenarios; it does not recommend borrowing or investment decisions, and it does not decide or guarantee any authority's outcome. Loan disputes, enforcement on security, prosecution and seizure go to Zatra's advocate.

Sources and status

Accurate as at 9 October 2026. The decision was read in the BoT's own statement.

• MPC Statement No. 245: Bank of Tanzania, 8 Oct 2026. Accessed 9 Oct 2026.
• MPC Statement No. 244: Bank of Tanzania, 3 Jul 2026. Accessed 9 Oct 2026.
• MPC statement: Bank of Tanzania, 2 Apr 2026. Accessed 9 Oct 2026.
• MPC statement: Bank of Tanzania, 4 Apr 2025. Accessed 9 Oct 2026.
• MPC statement: Bank of Tanzania, 19 Jan 2024. Accessed 9 Oct 2026.
• Monetary Policy Statement 2026/27: Bank of Tanzania, June 2026. Accessed 9 Oct 2026.
• Press releases: Bank of Tanzania, 2026. Accessed 9 Oct 2026.
• Bank of Tanzania Act, 2006: Bank of Tanzania. Accessed 9 Oct 2026.
• CPI 2026: National Bureau of Statistics, 8 Oct 2026. Accessed 9 Oct 2026.
• BOT maintains Central Bank rate: The Respondents, 9 Oct 2026. Accessed 9 Oct 2026.
• BoT holds rate at 6.25pc: Daily News, 9 Oct 2026. Accessed 9 Oct 2026.
• Tanzania central bank holds key rate: Reuters via CNBC Africa, 8 Oct 2026. Accessed 9 Oct 2026.
• CBR raised to 6.25% for Q3 2026: TanzaniaInvest, 7 Jul 2026. Accessed 9 Oct 2026.
• Policy rate raised to 6 per cent: The Star, 5 Apr 2024. Accessed 9 Oct 2026.
• Key lending rate held: Reuters via Polity, 2 Oct 2025. Accessed 9 Oct 2026.
• Zatra fee register lines F0208, F0209, F0246, F0556, F0558, F0559, NEW-02-08 and NEW-02-09: fees at 26 Sep 2026. Accessed 9 Oct 2026.

Figures to confirm before you act

• Corridor: 4.75% to 7.75% is Zatra's arithmetic on the April 2026 corridor; the October statement does not restate it
• Untabled quarters: Q3 2024 to Q1 2025 and Q1 2026 decisions were not read for this note
• Current rates: yields, lending and deposit figures are April 2026; use the latest auction results and bank offers
• Withholding: how F0208 applies to a given investor and instrument, including government securities and Zanzibar residents
• Late tax rate: the fourth quarter 2026 statutory rate

This article is general information based on official sources available at the date of publication. It is not legal, tax or financial advice. Laws and notices change. Verify with the issuing authority or consult Zatra before acting.