By The Citizen Reporter Source: The Citizen Jan 4, 2010 The Bank of Tanzania (BoT) is optimistic that the inflation rate will fall to six per cent in the next six months. The country failed to reach the June 2009 target of seven per cent. The cost of living averaged 12.3 per cent between January and November. The bank has forecast the cost of living in Tanzania to average 7.5 per cent this year and eight and 7.2 per cent in 2011 and 2012 respectively. The June 2008 rate of the cost of living was 10.7 per cent. "The easing of global commodity prices, coupled with the sustained prudent fiscal and monetary policies are expected to contain the inflationary pressure in the coming months," BoT economic research and policy head Joe Masawe told The Citizen. According to him, the BoT will continue to influence the growth of money supply through open market operations, foreign exchange market operations, discount rates and statutory requirements. Other efforts include increasing agricultural productivity through the Kilimo Kwanza programme in which 2.1 million farmers will have subsdised fertiliser and agro-machinery. "With these factors in place, the single digit inflation should be achieved as projected," Dr Masawe noted. He said the recent rise in inflation was mainly caused by increasing food prices and high transport costs. Ms Razia Khan of Standard Chartered Research said the drought-related surge in headline inflation in 2009 revealed how problematic the high weighting of food in the consumer price index basket was. "The introduction of a new basket in 2010, with a reduced weighting for food should see inflation decline meaningfully," Ms Khan said in a response to an email by The Citizen.