THE CENTRAL BANK OF TANZANIA(BOT) HAS LOWERED THE INTEREST RATE ON ITS LOANS TO OTHER BANKS TO 9% FROM 12% THAT WAS BEING USED EARLIER.

The Central Bank of Tanzania(BoT) has lowered the interest rate on its loans to other banks to 9% from 12% that was being used earlier.

According to Miss Julian B. Raphael, who is the Deputy Governor, Administration and Internal Controls of BoT, the implementation of the new rate shall commence on the 7th of August until further revision on the rates.#4 Believes that other banks will also be able to give loans at a lower interest rate and eliminate money scarcity in the country.

#9 Wonders whether banks will also reduce the interest rates as they are not very friendly towards the poor. Thinks the Bank of Tanzania should create a law that forces banks to give out loans at a minimum rate of atleast 15%.

#13 Thinks that the banks will never reduce their interest rates unless there is a law that will force them to do so. When BOT went from 16% to 12% the interest rate stayed at 18% to 24% now that the BoT's rate has gone down to 9% the member believes the other banks wont reduce their interest rates unless BOT becomes the regulator other banks or a regulatory authority is formed.

#20 States that, the problem is that business owners take loans to have more products on their shelves but this would only make sense if consumers have money in their pockets to spend.

"Remember, it doesn't make sense if consumers take loans because at the end of the day they wont be able to repay. So it would make more sense to induce more cash in the circulation to create more demand for products which will force business owners to expand".

#24 Responds by writing, the flow of money has a 'ripple effect'! You are rich because your neighbors are rich or you are poor because your neighbors are poor. If there is enough liquidity in the circulation, that means any one will easily get the money because there will be enough money to reward each hardworking individual.