The Bank of Tanzania (BOT) has announced monetary measures to be taken to offset the impact of corona virus and boosting the economy of the country. These measures come after the central bank’s monetary policy committee met and approves various policy measures to cushion the economy from adverse effects of COVID-19 to safeguard the financial sector stability. The measures taken includes the following:
- Reduction of statutory discounting rate from 7% to 5% with effect from 12th May 2020.
- Lowering statutory minimum reserves requirements from 7% to 6% to be applied effective from 8th June 2020.
- Allowing banks to borrow from the Bank of Tanzania with less collateral by reducing haircuts on government securities by 50% effective from 12th May 2020.
- Allowing commercial banks to consider restructuring of loans and loan repayment rescheduling after having thorough discussion with their borrowers who are adversely affected by COVID-19 impact.
- Encourage the usage of digital payment system by allowing Mobile money operators to increase daily transaction limit to their customers to TZS 5 million and daily balance to TZS 10 million. This is about 50% uplifting of maximum limit.
With these measures at place, BOT expect banks to have increased liquidity, additional space for banks to borrow from them, reduces congestion of customers in banking premises and increase usage of digital payment system and hence neutralize the impact of COVID-19.