Tanzania's banks interest rates fall in March

The banks’ interest rates on deposits and loans have generally decreased in March relative to the preceding month, thus narrowing down the gap of the two.

The Bank of Tanzania (BoT)’s Monthly Economic Review of April shows that overall interest rate on time deposits in March averaged 7.33 per cent compared to 7.89 per cent of February. 

At the same time overall lending rate fell to 15 per cent from 16.14 per cent in corresponded month.

The central bank says interest rate on one year deposits averaged 11 per cent compared with 10.68 per cent while overall lending rate was 13.93 per cent compared with 14.37 per cent.

Following these developments, BoT says, the interest rate spread between “one year deposits and loans narrowed to 2.98 percentage points in March 2015 from 3.63 percentage points in the preceding month.”

The economic review also shows that all selected economic activities recorded increase in credit from banks, with exception of agriculture which contracted.

Credit to trade related activities remained high, recording an annual growth of 35.7 per cent, followed by building and construction, and transport and communication which grew by about 28 per cent and 24 per cent, respectively.

Although credit growth to agriculture activity contracted, its share in the stock of credit remained in the top four economic activities that recorded much of the credit from banks.

Other dominant activities in this cluster were trade, personal loans, and manufacturing. The interest rate dropping also helped to push up exports went up to 9.35 billion US dollars for the year ending March compared to 8.59 bilion US dollars recorded in the corresponding period in 2014.

“Good performance in exports of manufactured goods, travel receipts and traditional exports accounted for the improvement,” the report says. However, the export value of gold decreased due to fall in export volume and prices in the world market.
Source: Daily News, reported from Dar es Salaam, Tanzania
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