01 — OverviewExecutive Summary
Tanzania's financial markets stayed liquid and well-subscribed through June 2026, even as the Bank of Tanzania (BOT) began tightening policy in response to an external supply shock. Mainland GDP grew 6.0% in Q1 2026 (up from 4.3% a year earlier) and headline inflation eased slightly to 4.0%, still inside the 3–5% target band — but core inflation climbed to 3.7%, its highest in two years, as Middle East-driven energy and freight costs passed through into wider prices.
Against that backdrop, the government securities market was comfortably oversubscribed: Treasury bills drew bids 2.3 times the tender size and Treasury bonds drew bids nearly 4.0 times the tender size, even as the 10-year yield jumped by almost a full percentage point. The interbank cash market stayed the main channel for redistributing shilling liquidity, with turnover up 44.8% month-on-month and the overall rate easing to 6.0%, tracking closely within the BOT's 4.25%–7.25% policy corridor. The shilling depreciated only marginally against the US dollar, and foreign exchange reserves covered 4.4 months of imports — above the 4-month national benchmark.
- Policy shift in motion: the CBR was held at 5.75% through Q2 2026, then raised to 6.25% for Q3 2026 (effective 2 July) as core inflation broadened.
- Strong demand for government paper: combined T-bill and T-bond bids of over TZS 2.8 trillion against a combined tender of under TZS 940 billion in June alone.
- Longer yields diverged: the 10-year Treasury bond yield rose sharply (9.40% → 10.39%) while the 25-year yield eased slightly (11.99% → 11.89%).
- Ample interbank liquidity: turnover of TZS 2,508.7 billion, with the Bank using reverse repos to smooth uneven liquidity distribution among banks.
- Stable currency: the shilling depreciated by just 0.08% year-on-year to June 2026, supported by gold, tourism and agricultural export earnings.
Before you go further — the bigger picture
This review covers June 2026's market data. For the structural question behind it — what is actually standing between Tanzania and its Dira 2050 ambitions — read TICGL's flagship policy analysis on the gaps keeping a trillion-dollar economy out of reach.
Read: What's Next for Tanzania's Economy? The Policy Gaps Keeping $1 Trillion Out of Reach by 2050 →02 — ContextMacroeconomic Snapshot, June 2026
Financial market conditions do not sit in isolation — they respond to growth, inflation and the external position. Here is the backdrop against which the Treasury and interbank markets moved in June 2026.
03 — Policy BackdropMonetary Policy: Holding Through a Supply Shock, Then Acting
Since January 2024, the BOT has run an interest rate-based framework in which the quarterly Central Bank Rate (CBR) is the primary policy lever, transmitted through the 7-day interbank rate to banks' funding costs and ultimately to lending and deposit rates. The MPC held the CBR at 5.75% through Q2 2026 (April–June), reasoning that a first-round supply shock — Middle East conflict pushing up oil, fertilizer, freight and insurance costs — did not yet warrant tightening, given well-anchored inflation expectations, a good 2025/26 harvest, and government fuel subsidies absorbing part of the shock.
That changed once core inflation — which strips out unprocessed food and energy — rose from 2.2% in March 2026 to 3.7% in June 2026, evidence that the shock was broadening into second-round effects across the wider economy. On 2 July 2026 the MPC raised the CBR to 6.25% for Q3 2026.
| Quarter | CBR | Interest rate corridor | Rationale |
|---|---|---|---|
| Q2 2026 (Apr–Jun) | 5.75% | ±150 bps → 4.25%–7.25% | Accommodate temporary, first-round supply-shock effects; avoid choking growth |
| Q3 2026 (from 2 Jul) | 6.25% | Corridor re-based on new CBR | Contain broadening, second-round pass-through evidenced by rising core inflation |
A higher CBR from July 2026 raises the anchor for the whole yield curve. Money-market rates that eased through June (interbank 6.00%, T-bill weighted yield 4.83%) are the base against which the Q3 hike will be measured in the BOT's next monthly review — watch for a re-pricing higher across short-dated paper and bank lending rates from Q3 2026 onward.
04 — Core FocusGovernment Securities Market
Government securities auctions were comfortably oversubscribed in June 2026, and longer maturities in particular attracted strong investor appetite — a sign that domestic institutional investors (banks, pension funds, insurers) continue to see Tanzanian government paper as an attractive, liquid store of value even as yields moved in different directions across the curve.
Treasury Bills
Treasury Bills — Overall Weighted Average Yield
| Tenor | Dec-25 | Mar-26 | May-26 | Jun-26 |
|---|---|---|---|---|
| 35 days | 5.38 | 4.20 | 3.23 | 2.82 |
| 91 days | 5.93 | 4.23 | 3.78 | 3.56 |
| 182 days | 5.91 | 5.69 | 5.23 | 4.98 |
| 364 days | 6.24 | 5.80 | 5.63 | 6.65 |
| Overall weighted average | 5.87 | 5.21 | 4.74 | 4.83 |
Short tenors (35–182 days) kept falling through June, but the 364-day rate jumped to 6.65% — the steepest point on the bill curve, suggesting investors are already pricing in the Q3 2026 CBR hike at the one-year point. Source: BOT Table A4.
Treasury Bonds
Treasury Bond Yields to Maturity — 10-Year vs 25-Year
| Tenor | Dec-25 | Mar-26 | Jun-26 | Chg. Dec–Jun (pp) |
|---|---|---|---|---|
| 2-year | 10.05 | 8.36 | 8.36 | -1.69 |
| 5-year | 10.54 | 10.54 | 9.54 | -1.00 |
| 7-year | 9.71 | 9.71 | 9.71 | 0.00 |
| 10-year | 12.45 | 11.30 | 10.39 | -2.06 |
| 15-year | 12.08 | 10.78 | 10.39 | -1.69 |
| 20-year | 12.02 | 10.71 | 10.43 | -1.59 |
| 25-year | 13.19 | 11.99 | 11.89 | -1.30 |
Across almost every tenor, yields to maturity have fallen since December 2025 — a sign of easing term premia and strong institutional appetite for duration — even though June's single-month print on the 10-year (+0.99pp m/m) was a sharp reversal. Source: BOT Table A4.
Government Securities Issued for Financing Purposes
In June 2026 alone, the government mobilised TZS 468.0 billion domestically — TZS 194.7 billion via Treasury bills and TZS 273.3 billion via Treasury bonds — against domestic debt service of TZS 1,551.5 billion (TZS 1,264.4 billion principal, TZS 287.1 billion interest). Source: BOT Chart 2.7.2.
05 — Core FocusInterbank Cash Market
The interbank cash market remains the primary channel through which banks redistribute shilling liquidity among themselves, and it is the fastest-moving transmission point for BOT policy. In June 2026, turnover rose sharply and the overall rate eased further within the policy corridor.
Money Market Rates: Interbank Cash Market vs Treasury Bills
Both money-market rates converged toward — and then traded close to — the CBR corridor by June 2026, a textbook sign of effective monetary policy transmission under the interest-rate framework adopted in January 2024. Source: BOT Table A4.
Interbank Turnover by Tenor, June 2026
| Maturity band | Dec-25 | Jun-26 |
|---|---|---|
| Overnight | 6.00 | 5.53 |
| 2–7 days | 6.30 | 5.90 |
| 8–14 days | 6.26 | 6.46 |
| 15–30 days | 6.40 | 6.64 |
| 31–60 days | 7.20 | 6.70 |
| 61–90 days | 8.11 | 6.84 |
| 91–180 days | 8.89 | 7.07 |
| 181 days & above | 10.93 | 12.00 |
| Overall | 6.29 | 6.00 |
Rates compressed across nearly every short band, but the longest interbank tenor (181+ days) rose sharply — echoing the same forward-looking repricing seen in the 364-day T-bill. Source: BOT Table A4.
Where liquidity was unevenly distributed among banks during June 2026, the BOT injected funds through reverse repo operations rather than letting pockets of tightness push the interbank rate outside its corridor — a routine but important part of keeping short-term money-market rates anchored near the CBR.
06 — Related MarketInterbank Foreign Exchange Market
The interbank foreign exchange market (IFEM) — the venue where banks and the BOT trade shillings against foreign currency — stayed broadly stable in June 2026, underpinned by strong export receipts, particularly gold.
TZS / USD Exchange Rate (End of Period)
The shilling's gradual, orderly slide from about TZS 2,437–2,605/$ across the period to TZS 2,623.5/$ by June 2026 reflects managed stability rather than sharp devaluation, aided by gold export earnings and the BOT's domestic gold purchase programme. Source: BOT Table A10.
07 — TransmissionCommercial Bank Lending & Deposit Rates
Money-market conditions ultimately feed through to the rates households and businesses actually face. In June 2026 the overall lending rate eased slightly while deposit rates firmed, narrowing — then widening — the spread borrowers pay over what savers earn.
Overall Lending Rate vs Overall Time Deposit Rate
| Item | Dec-25 | Jan-26 | Feb-26 | Mar-26 | Apr-26 | May-26 | Jun-26 |
|---|---|---|---|---|---|---|---|
| Savings deposit rate | 3.02 | 2.94 | 2.98 | 2.89 | 2.91 | 2.85 | 2.90 |
| Overall lending rate | 15.24 | 15.10 | 15.11 | 15.11 | 15.33 | 15.32 | 15.20 |
| Short-term lending (up to 1yr) | 15.46 | 15.49 | 15.41 | 15.45 | 15.31 | 15.38 | 15.38 |
| Negotiated lending rate | 12.38 | 12.25 | 12.19 | 12.21 | 12.56 | 11.90 | 11.93 |
| Overall time deposit rate | 8.36 | 8.33 | 8.32 | 8.33 | 8.54 | 8.43 | 8.60 |
| 12-month deposit rate | 9.58 | 9.70 | 9.82 | 9.60 | 9.81 | 10.17 | 9.72 |
| Negotiated deposit rate | 11.66 | 11.74 | 11.48 | 11.57 | 11.37 | 11.25 | 11.17 |
| Short-term interest spread | 5.88 | 5.79 | 5.59 | 5.85 | 5.50 | 5.22 | 5.66 |
The negotiated lending–deposit spread widened to 5.66 percentage points in June 2026 from 5.22 points in May, driven mainly by movement in one-year lending rates. Source: BOT Table 2.4.1.
08 — TICGL ViewWhat This Means for Businesses, Investors and Treasury Desks
For bond investors
The flattening of yields across most tenors since December 2025 (2yr, 10yr, 15yr, 20yr, 25yr all lower) suggests strong institutional appetite for duration. But the sharp June jump in the 10-year yield and the 364-day bill rate signals the market is already front-running the Q3 2026 CBR hike — investors adding duration now should expect near-term mark-to-market volatility before the curve resettles.
For corporate treasuries & borrowers
Short-term borrowing costs (interbank, T-bills) eased through June, but the CBR move to 6.25% from July is likely to push lending rates — currently 15.20% overall, 11.93% for negotiated prime borrowers — modestly higher in Q3. Businesses planning working-capital facilities may want to lock in rates before repricing filters through.
For importers & exporters
The shilling's 0.08% annual depreciation and reserves covering 4.4 months of imports point to continued currency stability in the near term. Importers of fuel, fertiliser and industrial inputs — the categories driving the 20.6% rise in goods imports over the year to June 2026 — still face upside risk from global energy prices rather than from the exchange rate itself.
- Both Treasury bills and bonds were significantly oversubscribed in June 2026 (2.3x and ~4.0x respectively), reflecting deep domestic demand for government paper.
- The interbank cash market absorbed a 44.8% jump in turnover while the overall rate eased to 6.00%, staying comfortably inside the BOT's 4.25%–7.25% corridor.
- The CBR held at 5.75% through Q2 2026 but was raised to 6.25% for Q3 2026 as core inflation broadened from 2.2% to 3.7% — the clearest signal yet that policy is turning less accommodative.
- The shilling remains one of the more stable currencies in the region, helped by gold, tourism and agriculture export receipts.
- Lending–deposit spreads widened again in June (5.66pp), meaning the transmission of cheaper money-market rates to end borrowers remains incomplete.
09 — Quick AnswersFrequently Asked Questions
What is Tanzania's Central Bank Rate (CBR) in mid-2026?
The BOT held the CBR at 5.75% through Q2 2026 (April–June). On 2 July 2026, the Monetary Policy Committee raised it to 6.25% for Q3 2026, after core inflation rose from 2.2% in March to 3.7% in June.
Were Treasury bills and bonds oversubscribed in June 2026?
Yes. T-bills (tender TZS 552.1bn) attracted bids of TZS 1,295.9bn — about 2.3 times the offer. T-bonds (10- and 25-year, tender TZS 387.6bn) attracted bids of TZS 1,539.6bn — about 4.0 times the offer.
What happened to the interbank cash market rate in June 2026?
It eased to 6.00% from 6.14% in May 2026, as turnover rose to TZS 2,508.7bn from TZS 1,732.7bn, with 7-day transactions making up 56.8% of volume.
Is the Tanzanian shilling stable against the US dollar?
Broadly yes — the shilling depreciated by only about 0.08% in the year to June 2026 (vs 0.21% the year before), helped by strong gold, tourism and agricultural export earnings and a 4.4-month import cover of reserves.
10 — MethodologySources & Notes
- All figures in this review are compiled from the Bank of Tanzania, Monthly Economic Review, July 2026 (data as of June 2026), including Tables 2.4.1, 2.5.1–2.5.3, A3, A4, A9 and A10, and Charts 2.3.1–2.3.3, 2.5.1–2.5.3 and 2.7.2.
- Percentage changes and subscription ratios (e.g. "2.3x", "44.8%") are calculated by TICGL Research from the underlying BOT figures for reader convenience.
- Figures marked provisional in the source report may be revised in subsequent BOT publications; treat month-to-month moves in the most recent print with appropriate caution.
- This page is an independent analytical summary prepared by TICGL/TERI and does not constitute investment advice. Readers making financial decisions should consult a licensed advisor and the original BOT publication.
Muhtasari kwa Kiswahili
Masoko ya fedha Tanzania yaliendelea kuwa na ukwasi wa kutosha na uhitaji mkubwa mwezi Juni 2026, licha ya changamoto za kimataifa zinazosababishwa na mzozo wa Mashariki ya Kati. Uchumi ulikua kwa asilimia 6.0 katika robo ya kwanza ya 2026, na mfumuko wa bei ulipungua kidogo hadi asilimia 4.0, ndani ya lengo la Serikali la asilimia 3–5. Hata hivyo, mfumuko wa bei wa msingi (core inflation) ulipanda hadi asilimia 3.7, jambo lililoifanya Kamati ya Sera ya Fedha (MPC) kupandisha Kiwango cha Riba cha Benki Kuu (CBR) kutoka asilimia 5.75 hadi asilimia 6.25 kuanzia robo ya tatu ya 2026.
Katika soko la dhamana za Serikali, minada ya hati fungani za muda mfupi (Treasury bills) na hati fungani za muda mrefu (Treasury bonds) ilipata uhitaji mkubwa kuliko kiwango kilichotolewa — mara 2.3 kwa hati za muda mfupi na karibu mara 4.0 kwa hati za muda mrefu. Riba ya wastani ya hati za miaka 10 ilipanda kwa kasi hadi asilimia 10.39, wakati riba ya hati za miaka 25 ilishuka kidogo hadi asilimia 11.89.
Katika soko la fedha baina ya mabenki (interbank cash market), kiwango cha mauzo (turnover) kiliongezeka kwa asilimia 44.8 hadi shilingi bilioni 2,508.7, na riba ya wastani ilishuka hadi asilimia 6.0, ikikaribiana zaidi na CBR — ushahidi wa usambazaji mzuri wa sera ya fedha. Thamani ya shilingi ilibaki tulivu, ikishuka kwa asilimia 0.08 tu mwaka hadi Juni 2026, ikisaidiwa na mauzo ya dhahabu, utalii na mazao ya kilimo.
- CBR: asilimia 5.75 (robo ya pili) → asilimia 6.25 (robo ya tatu ya 2026)
- Riba ya wastani ya soko la mabenki: asilimia 6.00 (Juni 2026)
- Riba ya wastani ya hati fungani za muda mfupi: asilimia 4.83
- Shilingi: TZS 2,633.73 kwa dola moja ya Marekani (wastani wa Juni 2026)
Chanzo: Benki Kuu ya Tanzania (BOT), Monthly Economic Review, Julai 2026. Uchambuzi huu umeandaliwa na Idara ya Utafiti ya TICGL / Tanzania Economic Research Institute (TERI).