Evolving Monetary Policy Frameworks in Low-Income Countries: The Tanzanian Experience

  • Christopher Adam
  • Pantaleo Kessy
  • Ben Langford
Chapter
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Abstract

This chapter describes the evolution of monetary policy in Tanzania since the mid-1990s, when the Bank of Tanzania pursued a conventional reserve money programme, with broad money as the intermediate anchor for inflation and reserve money growth as the principal policy instrument. While this approach, and a managed floating exchange rate regime, supported a sustained period of high economic growth, the increased globalization of Tanzania’s economy and the associated move towards greater capital account openness has prompted the Bank of Tanzania to embark on a transition towards a price-based monetary policy framework, in which the money aggregates are replaced by an explicit inflation target and a greater reliance is placed on the short-term interest rate as the main policy instrument.

Keywords

Bank of Tanzania Reserve money programme Exchange rate Money aggregates Policy rate IMF Monetary transmission mechanism 
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Copyright information

© The Editor(s) (if applicable) and The Author(s) 2016

Authors and Affiliations

  • Christopher Adam
    • 1
  • Pantaleo Kessy
    • 2
  • Ben Langford
    • 3
  1. 1.OxfordUK
  2. 2.Bank of Tanzania and International Growth CentreDodomaTanzania
  3. 3.HM Treasury and International Growth CentreLondonUK

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