By Nicholas Bariyo
Tanzania's central bank held its key lending rate at 6%, citing receding inflation and a recovering economy.
Bank of Tanzania Governor Emmanuel Tutuba said in a statement that inflation was 3.1% at the end of May, below the target of 5%.
"Inflation is projected to remain low in the second half of 2024 and beyond, ranging from 3%-4%," he said.
In January, the central bank set rates at 5.5% as part of a new monetary policy framework, before hiking to 6% in April.
The country's economy, which posted 5.1% growth last year from 4.7% in 2022, is expected to trend higher in 2024, driven by mining, agriculture and the energy sector. The economy is estimated to have expanded in the first and second quarters of the year by some 5% and 5.4%, respectively.
Tanzania, Africa's third largest gold producer behind South Africa and Ghana, is expected to continue benefiting from improving global gold prices throughout 2024, economists at Oxford Economics Africa said.
"We expect an increase in forex inflows from gold, which accounts for a significant portion of total export receipts, as we expect gold prices to rise on average by 19.3% in 2024," Oxford Economics said in a note.
"The central bank has reason to be optimistic."
Write to Nicholas Bariyo at Nicholas.Bariyo@wsj.com
(END) Dow Jones Newswires
07-04-24 1039ET
