Tanzania to reduce liquidity in second half of the year to tackle inflation

Tanzania will reduce liquidity over the rest of 2022 in order to tackle a surge of inflation, the central bank’s Monetary Policy Committee (MPC) said on Saturday.

“The MPC approved the Bank of Tanzania to reduce the speed of expanding liquidity in the remainder of 2022, in order to tame inflationary pressures from the demand side, while safeguarding the growth of the economy,” an MPC statement said, without offering further detail.

Inflation in the East African country hit 4.4% in June, the latest month for which data was available. The MPC warned in its statement that inflation could rise further because of prices globally for food, fuel, and fertilizer.