Currency Appreciation & Sustainable Debt Management Drive Economic Resilience
Tanzania's macroeconomic position in November 2025 demonstrated remarkable resilience, characterized by a strengthening shilling and prudent debt management. The Tanzanian Shilling appreciated significantly from TZS 2,460.54/USD in October to TZS 2,444.81/USD in November, representing a monthly gain of TZS 15.73. More impressively, the currency recorded an 8.1% year-on-year appreciation, reversing the 6.3% depreciation witnessed in late 2024.
This currency stability was underpinned by robust export performance, particularly gold exports which surged 42.1%, alongside overall export growth of 13.1%. The Interbank Foreign Exchange Market (IFEM) showed increased activity with turnover rising to USD 158.7 million, while the Bank of Tanzania strategically sold USD 52.5 million net to smooth market volatility without distorting fundamentals.
National debt management remained disciplined, with total debt standing at USD 51.9 billion and recording modest monthly growth of just 0.4%. Although external debt accounts for 69.7% of the total—predominantly USD-denominated—the appreciating shilling has reduced exchange-rate risks and debt-servicing pressures. Strong foreign reserves of USD 6.43 billion, equivalent to 4.9 months of import cover, ensure debt service obligations are comfortably met.
Strong exports → FX inflows → Shilling appreciation → Lower debt servicing costs → Increased confidence → More investment
This virtuous cycle demonstrates effective policy coordination between export promotion, currency management, and fiscal discipline.
| Indicator | October 2025 | November 2025 | Change |
|---|---|---|---|
| Average Exchange Rate (TZS/USD) | 2,460.54 | 2,444.81 | ▼ 15.73 (Appreciation) |
| Month-on-Month Change | — | Shilling Strengthened by 0.64% | |
| Year-on-Year Change | — | +8.1% Appreciation (Reversed 6.3% depreciation from Nov 2024) | |
| Indicator | October 2025 | November 2025 | Change |
|---|---|---|---|
| Total IFEM Turnover | USD 133.7 million | USD 158.7 million | +18.7% |
| Bank Share of Transactions | — | 66.9% | Dominant market participants |
| BoT Net FX Intervention | — | USD 52.5 million (net sale) | Smoothing volatility |
| Debt Category | Amount | Share |
|---|---|---|
| Total National Debt | USD 51,870.3 million | 100% |
| External Debt | USD 36,127.8 million | 69.7% |
| Domestic Debt | TZS 38,361.3 billion | 30.3% |
| Monthly Debt Growth: 0.4% (Controlled & Sustainable) | ||
| Indicator | Value | Details |
|---|---|---|
| External Debt Stock | USD 36,127.8 million | 69.7% of total debt |
| Public Sector Share | 80.5% | Government & SOEs |
| USD-Denominated Debt | 66.8% | Primary currency exposure |
| Euro-Denominated Debt | Second largest | Diversified currency risk |
High USD Exposure (66.8%): Makes shilling stability critical for debt sustainability. Every 1% depreciation increases TZS-equivalent debt servicing costs.
Current Mitigation: The 8.1% shilling appreciation has reduced exchange rate risk and lowered the TZS cost of servicing USD-denominated debt, creating favorable conditions for debt management.
| Indicator | Value |
|---|---|
| Domestic Debt Stock | TZS 38,361.3 billion |
| Monthly Growth | 0.2% (Very modest) |
| Dominant Instruments | Treasury Bonds (Long-term focus) |
| Major Holders | Commercial Banks & Pension Funds (~56%) |
| External Debt Flow Item | November 2025 (USD million) |
|---|---|
| Loan Disbursements | 200.4 |
| Total Debt Service | 109.0 |
| Principal Repayment | 75.4 |
| Interest Payment (Estimated) | 33.6 |
| Net Position: +USD 91.4 million (Disbursements exceed servicing) | |
The relationship between Tanzania's currency stability and debt dynamics demonstrates a mutually reinforcing cycle of macroeconomic resilience.
| Economic Dimension | November 2025 Evidence | Effect on Shilling & Debt |
|---|---|---|
| Export Performance | Overall exports up 13.1% | ✓ Strengthens FX supply, supports shilling |
| Gold Exports | Surged +42.1% | ✓ Major USD inflows, reduces external pressure |
| Debt Accumulation | Only 0.4% month-on-month growth | ✓ Limited FX demand for debt servicing |
| Domestic Financing | Rising bond issuance in TZS | ✓ Reduces reliance on USD-denominated borrowing |
| Foreign Reserves | USD 6,432.9 million (4.9 months import cover) | ✓ Strong shock absorption capacity |
| Currency Appreciation | +8.1% year-on-year | ✓ Lowers TZS cost of USD-denominated debt |
Implication: Lower imported inflation, enhanced purchasing power, reduced debt servicing burden
✓ Highly PositiveAssessment: High USD exposure mitigated by appreciation, strong reserves, and export growth
✓ Under ControlBenefit: Lower rollover risk, stable funding base, reduced refinancing pressure
✓ SustainableStatus: Above EAC benchmark (4.5 months), provides strong shock absorption capacity
✓ ExcellentThe November 2025 data reveals a robust and mutually reinforcing relationship between Tanzania's currency stability and national debt management. The Tanzanian Shilling's 8.1% year-on-year appreciation, driven by strong export performance—particularly the 42.1% surge in gold exports—has created favorable conditions for managing the country's USD 51.9 billion debt portfolio.
Key achievements include:
The appreciating shilling reduces the TZS-equivalent cost of servicing USD-denominated external debt (66.8% of external debt), directly improving debt sustainability metrics.
Modest 0.4% monthly debt accumulation demonstrates fiscal discipline while meeting development financing needs through positive net flows.
Strong export earnings (13.1% growth) generate sufficient FX to comfortably meet debt service obligations without depleting reserves.
Increasing domestic financing (30.3% of total debt) through long-term TZS bonds reduces exchange rate vulnerability and rollover risks.
Strong exports → FX inflows → Shilling appreciation → Lower debt servicing costs → Improved fiscal space → Increased investor confidence → More foreign investment → Further economic growth
This positive reinforcement cycle, supported by prudent monetary policy, adequate foreign reserves (USD 6.43 billion), and effective Bank of Tanzania interventions, positions Tanzania favorably for sustained macroeconomic stability. The country's financial architecture demonstrates resilience against external shocks while maintaining the flexibility needed for continued development financing.
Tanzania's November 2025 performance reflects a well-managed economy with: