In a statement availed to the media yesterday, BoT Governor Prof Florens Luoga said the situation facilitates enhanced liquidity in the banking sector.
The BoT monetary policy committee (MPC) meeting on Monday this week was satisfied with policy implementation during September and October, he stated, noting that liquidity in the banking sector also contributed to stable and at lower interest rate levels.
The committee was also satisfied that credit growth in the private sector would continue to improve due to recovery in the global economy, along with central bank policy measures to stimulate lending at lower rates, he said.
Foreign reserves currently stand at $6.7bn/-, sufficient to cover seven months of projected import of goods and services, he stated.
The global economic growth pace was slightly lower than previously expected due to the re-emergence of COVID-19 infections in some countries and rising oil prices, but would gain momentum in future, the statement asserted, affirming that global growth would continue strengthening the Tanzania economy.
The committee believes that the increase in global fuel production will reduce energy prices.
The monetary policy committee urged supervising sustainable food security as it strengthens the value of the Tanzanian shilling by reducing inflationary pressures.
Inflation ranged from three to five percent as targeted, and is projected to remain within that range in line with regional agreements, especially the East African Customs Union protocol, he affirmed.
“Revenue collection was pleasing, with tax revenues exceeding 90 percent of the target. The Zanzibar economy grew by 6.5 percent in the second quarter of 2020 compared to 1.4 percent negative growth in the first quarter of 2020,” the statement noted, indicating that Zanzibar inflation remained below the target of five percent, with revenue collection reaching 73.6 percent of the target.
Based on the review of recent economic trends, as well as inflation projections as likely to remain within the target, the committee approved the BoT to continue implementing current monetary policy, increasing liquidity for the November-December 2021 period so as to further strengthen the economy, the statement added.