Wednesday, October 26, 2011

Bank of Tanzania Raises Repo Auction Rate

The Bank of Tanzania increased its repurchase agreement (repo) interest rate, placing the weighted average rate into double digits, with the rate last printing at 11.59% at the 25th of October auction (which compares to 8.24% at the start of the year, and a low of 0.93%).  Tanzania reported inflation of 16.8% in September, compared to 10.9% in June.

Inflation has been driven upwards by food supply variation, electricity shortages, and a weak shilling. The Tanzanian economy has grown between 6 and 7.4 percent over the past 6 years in real terms, and grew 7% in 2010.  The Tanzanian shilling (TZS) last traded around 1,768 against the US dollar, with the TZS weakening about 17% since March this year.


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