Dar es Salaam. The Bank of Tanzania (BoT) has addressed recent discussions regarding the performance of the Tanzanian Shilling, confirming a depreciation of 3.6 percent over the past twelve months but highlighting a remarkable appreciation of 9.51 percent between July and December 2024, making it the best-performing currency globally during that timeframe.
BoT Governor Emmanuel Tutuba stated that the recent depreciation seen since January 2025 is attributed to the seasonal nature of foreign exchange flows, alongside the country’s exchange rate policy that allows for flexibility based on market demand and supply with minimal intervention from the central bank.
"Despite currency fluctuations, Tanzania’s macroeconomic indicators remain robust. The economy grew by 5.4 percent in 2024, positioning it among the fastest-growing economies in Africa," he noted. He emphasized that under this policy framework, the exchange rate will continue to be set by the market dynamics of foreign exchange demand and supply, with limited central bank intervention.
Indicators of Tanzania’s macroeconomic health reveal stable prices, a narrowing current account deficit, and a resilient financial sector that supports the Shilling’s stability in the medium to long term. Inflation remains low at 3.1 percent as of February 2025, down from 4.6 percent in 2022.
In response to concerns regarding national debt, Governor Tutuba confirmed its sustainability with a debt-to-GDP ratio standing at 41.1 percent for the 2023/24 fiscal year—substantially below the International Monetary Fund’s recommended threshold of 50 percent.
Moreover, the current account deficit has considerably narrowed from 3.7 percent in 2023 to 2.7 percent of GDP in 2024, propelled by improved exports in agriculture, mining, and tourism, which contributed to the Shilling’s sharp appreciation observed towards the end of 2024.
Governor Tutuba asserted that Tanzania’s economic performance is consistent with reports from various financial institutions and global credit rating agencies.
The BoT remains dedicated to ensuring price stability through effective monetary policies that reinforce macroeconomic stability, including the Shilling’s stability.
In light of claims made about the Shilling being the world’s worst-performing currency, BoT has firmly refuted these allegations stating they mischaracterize the economic situation by erroneously attributing depreciation to increased imports, rising public debt, a widening current account deficit, and ongoing infrastructure projects such as the planned Bagamoyo Port.
BoT reassured the public of its commitment to maintaining economic stability, asserting that the recent fluctuations in the Shilling are consistent with expected market trends.
