CREDIT to the private sector recorded an annual growth of 11.1 percent in December last year compared with 4.9 percent in the corresponding period 2018, on account of accommodative monetary policy.
According to the Bank of Tanzania (BoT) monthly economic review for December last year, credit growth was observed prominently in agriculture, building and construction and transport and communication activities.
In terms of shares in the outstanding credit to the private sector, personal-related and trade activities continued to account for larger shares, at 28.7 and 17.7 percent, respectively.
During the reference period, domestic credit by the banking system grew by 6.2 percent in 2019 compared with 10.1 percent a year earlier.
The slow growth was attributed to the decline in credit extended to the Government, largely due to build-up of government deposits at the BoT following increase in revenue collection and streamlined expenditure.
Growth of money supply was in line with projected growth path for 2019/20, reinforced by sustained accommodative monetary policy and increase in credit to the private sector.
Net foreign assets of the banking system grew by 13.2 percent in the year ending December 2019 compared to a contraction of 8.3 percent in the year ending December 2018.
Much of the increase was reflected in foreign assets of the BoT, owing to continuous purchase of foreign exchange from the market following higher foreign exchange proceeds mainly from export of gold, manufactured goods, and receipts from tourism related activities.
Extended broad money supply grew at an annual rate of 9.6 percent in December 2019 compared with 4.5 percent in December 2018, driven by foreign exchange purchase-induced liquidity expansion and strong growth of credit to the private sector.
Broad money supply registered an annual growth of 11.8 percent in December 2019, higher than 3.8 percent in December 2018.
