Tanzanian Shilling (TZS) Stability
The Tanzanian shilling has demonstrated remarkable stability throughout 2025 despite rising public debt levels. This resilience is primarily attributable to three key factors: adequate foreign exchange reserves, controlled domestic borrowing practices, and effective monetary policy operations by the Bank of Tanzania.
Table 1: Exchange Rate Performance of the Tanzanian Shilling
| Indicator | Value |
|---|---|
| Average Exchange Rate (Dec 2025) | TZS 2,452.76 / USD |
| Average Exchange Rate (Nov 2025) | TZS 2,444.81 / USD |
| Monthly Movement | Slight depreciation |
| Annual Depreciation | 1.3% |
| 2024 Comparison | +3.8% appreciation |
TZS/USD Exchange Rate Trend (Nov-Dec 2025)
The chart demonstrates the stable trajectory of the Tanzanian Shilling against the US Dollar
💡 Key Interpretation
The shilling exhibited remarkably low volatility throughout the period, indicating that rising debt levels have not triggered exchange-rate pressure. This stability reflects strong institutional frameworks, prudent fiscal management, and adequate external buffers that have insulated the currency from debt-related vulnerabilities.
National Debt Position
Tanzania's national debt structure is characterized by external debt dominance, accounting for nearly 70% of total obligations. While this composition presents exchange-rate exposure risks, current levels remain manageable due to substantial foreign reserves and robust export earnings, particularly from gold and tourism sectors.
Table 2: Total National Debt Stock
| Debt Category | Amount |
|---|---|
| Total National Debt | TZS 134.9 trillion |
| External Debt | TZS 93.7 trillion |
| Domestic Debt | TZS 37.9 trillion |
| Share of External Debt | 69.5% |
| Share of Domestic Debt | 30.5% |
USD figures converted using Dec 2025 average rate: TZS 2,452.76/USD
National Debt Composition (TZS Trillion)
Visual breakdown of Tanzania's debt structure showing external debt dominance
💡 Key Interpretation
Tanzania's debt structure is external-debt dominant, which creates exchange-rate exposure as these obligations must be serviced in foreign currency. However, this risk is currently cushioned by adequate foreign reserves (TZS 15.5 trillion) and strong export earnings from gold, tourism, and agricultural products. The government's ability to maintain this balance will be critical for continued currency stability.
Domestic Debt and Shilling Stability
Tanzania's domestic debt profile reveals a well-structured portfolio dominated by long-term treasury bonds, which significantly reduces short-term liquidity pressures on the shilling. The local creditor base, comprising primarily commercial banks, pension funds, and the central bank, further insulates the currency from external exchange-rate shocks.
Table 3: Government Domestic Debt Stock
| Indicator | Amount (TZS billion) |
|---|---|
| Domestic Debt Stock | 37,899.0 |
| Treasury Bonds | 30,924.8 |
| Treasury Bills | 1,951.9 |
| Non-Securitized Debt (overdrafts, etc.) | 4,886.5 |
Domestic Debt Structure Breakdown
Distribution of domestic debt instruments showing bond dominance
💡 Key Insight
Most domestic debt is structured as long-term bonds (81.6% of total), which reduces short-term liquidity stress on the shilling. This maturity profile allows the government to spread repayment obligations over extended periods, minimizing the risk of sudden currency depreciation due to large, concentrated redemptions.
Table 4: Holders of Domestic Debt
| Creditor | Amount (TZS billion) | Share (%) |
|---|---|---|
| Commercial Banks | 10,979.6 | 29.0% |
| Pension Funds | 10,352.2 | 27.3% |
| Bank of Tanzania | 6,695.2 | 17.7% |
| Insurance Companies | 2,006.1 | 5.3% |
| Others | 7,128.0 | 18.8% |
Distribution of Domestic Debt Holders
Breakdown showing local institutional ownership of government debt
💡 Key Interpretation
Domestic debt is predominantly held by local institutions (commercial banks 29%, pension funds 27.3%, and Bank of Tanzania 17.7%), meaning there is no direct foreign-exchange pressure from repayments. This domestic creditor base provides stability, as debt service occurs in local currency without requiring foreign exchange outflows, thereby protecting the shilling from external volatility.