The Bank of Tanzania (BoT) is projected to maintain its policy rate at 6.25% until the end of 2026 before declining to 5.75% in 2027, according to recent macroeconomic forecasts.Inflation is expected to fall from 3.7% in 2026 to 3.5% in 2027, allowing the central bank to ease its restrictive monetary policy.The July 3 rate hike of 50 basis points was a preemptive measure to control inflation and stabilize the shilling amid global energy price volatility.Transportation costs surged due to US-Iran tensions, but Brent crude prices have dropped 9.3% since the June 17 US-Iran agreement, easing imported inflation.Analysts predict average Brent prices will fall to $71/barrel in 2027.While the BoT may keep rates steady through October, a gradual easing cycle is anticipated in 2027.However, tight liquidity conditions and robust economic growth (forecast at 6.0% in 2027) may limit aggressive rate cuts.Risks include potential geopolitical tensions and El Niño weather impacts on agriculture.