THE extended broad money supply rose to 30.15tri/- in March this year, up from 28.24tri/- in the corresponding period last year, which is equivalent to an annual growth of 6.8 per cent compared with 9.9 per cent in the corresponding month last year.
According to the Bank of Tanzania (BoT), monthly economic review for April, the broad money supply grew by 9.3 per cent compared to 7.1 per cent in the previous month and 10.8 per cent in the corresponding period last year.
This is a result of the implementation of monetary policy easing measures by the central bank in support of economic recovery through private sector credit growth.
During the period under review, the credit extended to the private sector in the country comprises loans extended by banks and microfinance institutions.
In March this year, the credit extended to the private sector by banks rose by 465bn/-to 20.47tri/-, equivalent to an annual growth of 2.3 percent compared with 8.6 percent in March last year.
The subdued growth rate of credit to the private sector is mainly attributable to the adverse effects of Covid-19 to some businesses, particularly those directly exposed to external shocks. These comprise of exports, such as tourism and traditional cash crops.
The credit extended by banks to the central government through purchase of government securities increased by 8.7 per cent compared to 7.2 per cent in the preceding month, which is within the borrowing limit of one per cent of Gross Domestic Product (GDP) set forth in the government budget for 2020/21.
The economic activities that exhibited strong growth of credit from banks were personal activities largely representing lending to micro, small and medium enterprises and hotels and restaurants.
In terms of shares of the outstanding stock of private sector credit by activity, personal activities continued to account for the largest share followed by trade and manufacturing activities.