DAR ES SALAAM, March 11 Tanzania's central bank
has asked commercial banks to consider lowering their lending
rates to help spark credit growth in east Africa's
Bank of Tanzania cut its discount rate to 12 percent from
16 percent effectively from March 6, the first time it has
lowered borrowing costs since 2013, after a steep drop in
private-sector credit growth last year.
There were expectations that the move "will enhance credit
growth and reduction in lending rates," central bank Governor
Benno Ndulu said in a statement late on Friday after a meeting
with chief executives of commercial banks in Dar es Salaam.
Bank of Tanzania's decision to slash the rate it charges
commercial lenders to borrow from it -- one of its main monetary
policy tools -- came after lending to the private sector grew by
2.5 percent in 2016 after expanding 26.8 percent a year earlier,
according to official data.
The International Monetary Fund warned in January that
tight fiscal and monetary policies threatened Tanzania's
forecast for growth of around 7 percent in fiscal year 2016/17,
which ends in June.
(Reporting by Fumbuka Ng'wanakilala; editing by Elias
Biryabarema and Lisa Shumaker)