Changes in the Bank of Tanzania's central bank policy rate have a significant impact on stock market performance at the Dar es Salaam Stock Exchange between 2010 and 2024.
NOT BSTOTAL BS
SOME BS — Verdict: Mixed
Verified by Lenz ·
The Short Version
The Bank of Tanzania only formally adopted a "central bank policy rate" in January 2024, meaning the specific instrument named in the claim did not exist for most of the 2010–2024 period. Supporting studies use generic interest rates over narrow sub-periods (e.g., 2012–2016), not the policy rate across the full window. Multiple credible Tanzania-specific studies find the interest rate and stock price transmission channels ineffective, with exchange rates and inflation playing dominant roles instead.
Caveats
The Bank of Tanzania operated under reserve money targeting via Open Market Operations for most of 2010–2023; a formal 'central bank policy rate' was only introduced in January 2024, so the claim's framing of a consistent policy rate impact across the full period is fundamentally inaccurate.
Multiple peer-reviewed, Tanzania-specific studies conclude that the interest rate channel and stock price channel are ineffective or weak in Tanzania, with exchange rate and inflation being the dominant monetary policy transmission mechanisms.
The supporting empirical evidence covers only partial sub-periods and uses generic interest rates rather than the BoT policy rate, making extrapolation to the full 2010–2024 period and to the specific policy rate instrument an unsupported generalization.