The Bank has no authority to arrange interest rate on loans to financial institutions (banks)

The government has said that the Bank of Tanzania has no legal authority to limit the guiding interest or interest will be used by local financial institutions including banks in providing loans.

The statement issued in Parliament in Dodoma, February 3, 2017 and Deputy Minister of Finance and Planning, Hon. Dr. Ashatu judges, while responding to basic questions posed by Member State of Mbagala, Hon. Issa Ali Mangungu, who wanted to know if the government could organize special interest mechanism guiding enable women and young people to get loans from banks for low interest in order to get rid of economic

Moreover MP wanted to know whether the Government might ordering commercial banks to loosen bail conditions for young men and women that has claimed yanarefusha process of access to credit for these groups.

Dr. Judge said that the interest rates in banks and other financial institutions are organized and relevant institutions depending on many factors, including the strength of the market, the characteristics of the borrower, market competition, the cost of access to finance, the trend of interest rates for government bonds, the cost of operating and inflation expectations.

He said that the Central Bank has been given the legal authority to supervise banks and other financial Taasissi it does not interfere the placement of mortgage interest on the institutions because it is contrary to the system of free market economy.

"Give instructions to banks and financial institutions to use certain levels of interest in their business, will make the Bank's lack of power and authority taking them step if a stake in the loss with interest the planned or directed by the Central Bank" stressed Dr. JUDGE

Deputy Minister of Finance and Planning, Dr. Ashatu judges, said that the Bank has continued with his role in the foundation of ensuring that the system is run based on the rules established to protect the interests of the nation and the economy to manage the increase in the money supply to make sure it goes in line with the actual needs of the economy to control inflation price.

She has mentioned them other functions of the BOT that is to ensure that the increase in bank credit does not affect the production of goods in accordance with the objectives of the money supply, to ensure that the securities market of government running effectively so that it can provide interest guiding depending on market conditions and the economy in general.