Prepared by TERI for research and strategic-information purposes only; it is not investment, legal, tax or financial advice. Figures come from the Bank of Tanzania's Monthly Economic Review (September 2026). Real rates and spreads marked "TERI calculation" are derived from published figures. Preliminary data for August 2026 may be revised.
01 — OverviewExecutive Summary
Banks' lending and deposit rates were largely unchanged in August 2026. The overall lending rate eased to 15.05% from 15.10%, negotiated lending rates for prime borrowers fell to 11.93% from 12.04%, the overall time deposit rate stayed at 8.78%, and negotiated deposit rates edged up to 11.06% from 10.99%. The spread between the up-to-one-year lending rate and the 12-month deposit rate narrowed to 5.95 percentage points from 6.20.
Policy tightening has not yet reached the loan book. The CBR is 6.25%, the Treasury bill yield is 4.86% and the 25-year bond yield is 11.48%, but borrowers still pay about 15%, roughly 8.8 percentage points above the policy rate (TERI calculation). Price of credit in Tanzania is set more by bank risk premia and funding structure than by the policy rate, which is why credit grew 33.0% despite a "less accommodative" stance.
1. The Policy Anchor: CBR, Corridor and Interbank Rates
The Monetary Policy Committee raised the CBR to 6.25% in July 2026 to contain second-round inflation from higher energy, fertiliser and transport costs linked to the Middle East conflict. The 7-day interbank rate is managed within a corridor of 4.75% to 7.75%. The overall interbank cash market rate averaged 6.67% in August, up from 6.57% in July.
| Policy & money-market rate | Aug 2025 | Jun 2026 | Jul 2026 | Aug 2026 |
|---|---|---|---|---|
| REPO rate | 5.30% | 5.75% | 6.25% | 6.25% |
| Lombard rate | 7.75% | 7.25% | 7.75% | 7.75% |
| Discount rate | 8.25% | 8.25% | 8.75% | 8.75% |
| Overall interbank cash market rate | 6.48% | 6.00% | 6.57% | 6.67% |
| Overall Treasury bill rate | 6.83% | 4.83% | 4.74% | 4.86% |
Policy Rate vs Interbank vs Treasury Bill Rate
02 — Cost of CreditLending Rates: Sticky Near 15%
The overall lending rate has stayed in a narrow 15.05%–15.33% band for twelve months, peaking at 15.33% in April 2026. Prime borrowers, who negotiate, pay about 3 percentage points less (11.93%). Short-term (up to one year) loans were 15.31%, down from 15.54% in July.
Lending Rate Trends
2.1 Lending rates by maturity
| Maturity (TZS loans) | Aug 2025 | Jul 2026 | Aug 2026 | Change y/y |
|---|---|---|---|---|
| Short-term (up to 1 year) | 15.64% | 15.54% | 15.31% | −0.33pp |
| Medium-term (1–2 years) | 16.45% | 16.51% | 16.53% | +0.08pp |
| Medium-term (2–3 years) | 15.01% | 15.11% | 15.02% | +0.01pp |
| Long-term (3–5 years) | 14.02% | 14.44% | 14.44% | +0.42pp |
| Term loans (over 5 years) | 14.22% | 13.92% | 13.93% | −0.29pp |
| Overall lending rate | 15.07% | 15.10% | 15.05% | −0.02pp |
| Negotiated lending rate | 12.72% | 12.04% | 11.93% | −0.79pp |
Lending Rate by Maturity
2.2 Credit demand is not rate-sensitive
Credit to the private sector expanded 33.0% in the year to August (31.2% in July), reaching TZS 55,229.9 billion. Annual growth was led by transport and communication (77.2%), mining and quarrying (75.9%), trade (47.1%), building and construction (41.8%) and agriculture (38.4%). Personal loans remain the largest share of bank portfolios at 34.1%, followed by trade and agriculture.
| Sector | Aug 2025 | Jun 2026 | Jul 2026 | Aug 2026 |
|---|---|---|---|---|
| Transport & communication | 18.8% | 59.5% | 66.0% | 77.2% |
| Mining & quarrying | 3.2% | 39.9% | 65.2% | 75.9% |
| Trade | 29.2% | 46.4% | 43.5% | 47.1% |
| Building & construction | 14.8% | 34.4% | 38.9% | 41.8% |
| Agriculture | 30.1% | 30.1% | 37.3% | 38.4% |
| Personal | 15.0% | 21.8% | 24.7% | 24.9% |
| Hotels & restaurants | 11.4% | 0.9% | 25.1% | 24.6% |
| Manufacturing | 3.4% | 8.3% | 5.1% | 12.9% |
Source: Bank of Tanzania, Table 2.2.2. Manufacturing credit grew only 12.9%, well below the 33.0% aggregate.
03 — Return on SavingsDeposit Rates: Time Deposits Edge Higher
The overall time deposit rate was 8.78% in July and August 2026, up from 8.33% in January. Negotiated deposits, mostly large and institutional, earned 11.06%. Ordinary savings deposits paid just 2.77%, the lowest in the series and below inflation of 4.3%.
Deposit Rate Trends
| Deposit tenor | Aug 2025 | Jul 2026 | Aug 2026 |
|---|---|---|---|
| Savings deposit | 2.90% | 2.90% | 2.77% |
| 1 month | 10.70% | 9.51% | 9.41% |
| 3 months | 8.59% | 9.61% | 9.74% |
| 6 months | 10.44% | 10.54% | 10.56% |
| 12 months | 9.99% | 9.34% | 9.36% |
| 24 months | 7.16% | 7.91% | 7.97% |
| Overall time deposit | 8.61% | 8.78% | 8.78% |
| Negotiated deposit | 10.99% | 10.99% | 11.06% |
Deposit Rate by Tenor
3.1 Foreign-currency deposits and loans
In foreign currency, the overall time deposit rate was 4.12% (4.11% a year earlier), savings rates rose to 1.80% from 0.93%, and the 12-month rate reached 5.31%. FX lending averaged 8.96% (8.59% a year earlier), with short-term FX loans at 10.03%. FX deposits stood at USD 6,077.7 million, or TZS 16,043.5 billion.
04 — IntermediationSpreads and Real Interest Rates
The short-term interest spread narrowed to 5.95 percentage points in August from 6.20 in July. It has ranged between 5.22 and 6.20 points since January 2026.
Short-Term Interest Spread
| Indicator (August 2026) | Nominal | Real (less 4.3% inflation) |
|---|---|---|
| Overall lending rate | 15.05% | 10.75% |
| Negotiated lending rate | 11.93% | 7.63% |
| 12-month deposit rate | 9.36% | 5.06% |
| Overall time deposit rate | 8.78% | 4.48% |
| Savings deposit rate | 2.77% | −1.53% |
| Treasury bill rate | 4.86% | 0.56% |
Real rates are TERI calculations using headline inflation of 4.3% (August 2026); core inflation is 4.1%. Rates are not directly comparable across instruments of different risk.
Core inflation has risen steadily since March 2026 to 4.1%, and services inflation reached 5.9%. If inflation drifts toward the 5% ceiling of the 3–5% target, real returns on savings narrow and the case for further tightening strengthens.
05 — Market BenchmarksThe Government Yield Curve
Government securities auctions were oversubscribed. Treasury bills drew bids of TZS 981.7 billion against TZS 580 billion offered (bid-to-cover 1.7); the 15- and 25-year bonds drew TZS 2,136.3 billion against TZS 621.5 billion (bid-to-cover 3.4). The 25-year yield fell to 11.48% from 11.89%, while the 15-year yield edged up to 10.55%.
Government Bond Yields by Maturity
Long yields (up to 11.48%) are far below the 12-month deposit rate paths of 2025 and roughly in line with prime lending at 11.93%. For banks, government paper at 9.5%–11.5% offers a low-risk alternative to lending at about 15%, with securities held by banks at TZS 11,718.3 billion.
06 — AnalysisWhat This Means
- Borrowers: expect little relief near term. Prime and well-collateralised borrowers can negotiate close to 12%; SMEs and personal borrowers face rates above 15%.
- Savers: time deposits at 8.78%–10.56% beat inflation, but savings accounts at 2.77% lose value in real terms.
- Banks: the 5.95 point spread plus high yields on long government bonds support margins, but external arrears and net foreign assets of other depository corporations turned negative at TZS −155.5 billion.
- Investors and project sponsors: a TZS financing cost near 15% versus 8.96% in foreign currency creates exchange-rate exposure; the shilling depreciated 6.7% y/y to TZS 2,657.01 per USD.
- Oil and fertiliser prices from the Middle East conflict could force further CBR increases.
- A strengthening El Niño threatens food prices and inflation into early 2027.
- Rapid credit growth of 33.0% could build asset-quality risk if rates rise.
07 — RecommendationsPolicy and Business Recommendations
1. Strengthen transmission
- Publish bank-level lending rate and spread data regularly to increase competition.
- Monitor whether the July CBR rise feeds into loan pricing in coming months.
2. Reduce risk premia
- Expand credit-reference coverage and collateral registries for SMEs.
- Scale up credit guarantee schemes for manufacturing and agriculture.
3. Protect small savers
- Encourage banks to offer inflation-competitive savings products.
- Promote retail access to Treasury bonds.
4. Plan financing carefully
- Businesses should compare TZS and FX financing on a hedged, all-in basis.
- Negotiate rates using audited accounts and security; prime-borrower pricing is about 3 points lower.
"A policy rate of 6.25% and a lending rate of 15.05% describe two different economies. Until risk premia, collateral systems and bank competition change, the central bank moves one rate while borrowers face another."
— TICGL / Tanzania Economic Research Institute (TERI)
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✉️ economist@ticgl.com →08 — Quick AnswersFrequently Asked Questions
What was Tanzania's overall lending rate in August 2026?
15.05%, down from 15.10% in July. Negotiated lending rates for prime borrowers fell to 11.93%.
What are Tanzania's deposit rates?
The overall time deposit rate was 8.78%, the 12-month rate 9.36%, negotiated deposits 11.06% and savings deposits 2.77%.
What is the Central Bank Rate?
6.25% since July 2026, with a corridor of 4.75% to 7.75%.
What is the interest rate spread?
5.95 percentage points between up-to-one-year lending and 12-month deposit rates, down from 6.20.
Built directly from the Bank of Tanzania Monthly Economic Review, September 2026: Section 2.2 (Monetary Policy), 2.3 (Interest Rates), 2.4 (Financial Markets), Tables 2.2.2, 2.3.1, A3 and A4. Real rates, y/y changes in rates and the policy-lending gap are TERI calculations.
Muhtasari kwa Kiswahili
Viwango vya Riba ya Mikopo na Amana Tanzania, Agosti 2026 — Kiwango cha jumla cha riba ya mikopo kilishuka kidogo hadi asilimia 15.05 kutoka 15.10, na riba kwa wakopaji wakubwa (negotiated) ilishuka hadi 11.93%. Riba ya jumla ya amana za muda ilibaki 8.78%, na amana za mazungumzo zilipanda hadi 11.06%.
Sera ya fedha: Benki Kuu iliongeza Kiwango cha Riba cha Benki Kuu (CBR) hadi 6.25% Julai 2026, lakini riba za mikopo za benki bado ziko karibu 15%. Mikopo kwa sekta binafsi ilikua 33.0%.
Tofauti ya riba (spread): Pengo kati ya riba ya mikopo ya hadi mwaka mmoja na amana ya miezi 12 lilipungua hadi pointi 5.95 kutoka 6.20.
Riba halisi: Kwa mfumuko wa bei wa 4.3%, riba halisi ya mikopo ni takriban 10.75%, amana za muda 4.48%, na akiba ya kawaida (2.77%) inapoteza thamani.
Hatari: Bei za mafuta, mbolea na El Niño zinaweza kuongeza mfumuko wa bei na kulazimisha ongezeko zaidi la CBR.
- CBR: 6.25% | Mikopo: 15.05% | Amana za muda: 8.78%
- Spread: pointi 5.95 | Mikopo ya sekta binafsi: +33.0%
- Mavuno ya hati fungani ya miaka 25: 11.48%
Chanzo: Benki Kuu ya Tanzania, Monthly Economic Review, Septemba 2026. Maelezo zaidi: economist@ticgl.com.