THE extended broad money supply increased by 547.3bn/-, which is a growth of 2.5 percent to a stock of 22.23tri/- in October on account of contraction in net foreign assets (NFA) of the banking system and slowdown in the pace of increase in domestic credit.
According to the Bank of Tanzania (BoT)
monthly economic review however, the growth was relatively low compared
to an increase of 3.08tri/- equivalent to a growth of 16.6 percent
registered in the same period in 2015.
The NFA of the banking system decreased
by 827.2bn/- compared with an increase of 2.19tri/- recorded in the
corresponding period in 2015 due to contraction in NFA of banks
following increase in foreign borrowing and decrease in deposits abroad.
In the period under review, domestic
credit increased by 1.56tri/-to a stock of 21.45tri/- compared with
increment of 3.17tri/- in the same period in 2015. The slower pace of
increase in domestic credit was reflected in credit to the government
and private sector.
Credit to the government from the
banking system increased by 11.9bn/- compared with 194bn/- recorded in
the corresponding period in 2015, supported by increase in deposits at
the BoT following increase in domestic revenue collection.
On the other hand, credit to the private
sector increased by 1.55tri/- to 16.65tri/-, translating into an annual
growth of 10.3 percent compared with 24.6 percent growth or increase of
2.97tri/- recorded in the corresponding period of 2015.
The slowdown in the growth of credit to
the private sector was recorded in all major economic activities. In
terms of share of total outstanding credit, personal loans and credit to
trade activities continued to command the largest share accounting for
almost 40 percent of the total outstanding loans.
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