There is hope for possible improvement in credit to the private sector after the Bank of Tanzania slashed the discount rate by four percentage points effective from Monday.
The central bank said it reviewed downward the discount rate – the interest rate at which it charges for lending to other banks from 16 per cent to 12 per cent starting.
Experts said the move could lead to reduction in lending rates.
It is a major policy stance taken by the central bank since President John Magufuli came to power in November 2015.
Commercial banks primarily extend loans and fund their activities through customer deposits.