Dar es Salaam – The Bank of Tanzania (BoT) is implementing new regulations alongside the Ministry of Finance to enforce a ban on the use of foreign currencies for domestic transactions. This initiative follows amendments to the Bank of Tanzania Act under Section 26(2), which prohibits foreign currency transactions within the nation.
Set to take effect on July 1, 2024, the law is designed to safeguard Tanzania’s monetary policy, ensuring the Tanzanian Shilling remains the primary currency used in the country.
Villela Waane, Manager of International Economics and the Real Sector at BoT, announced that once the drafting process is finalized, the regulations will be published and accessible to the public.
The use of foreign currency not only undermines the effectiveness of Tanzania’s monetary policy but also adds to inflationary pressures, Waane explained. “Using foreign currencies domestically limits the supply of dollars required for importing essential goods,” she emphasized.
In a subsequent directive, BoT has mandated commercial banks to stop facilitating transactions involving foreign currencies, including payments related to taxes, goods, and services.
“The goal is to bolster the value of the Tanzanian Shilling and ensure foreign currencies are reserved exclusively for essential imports,” she added.
Emmanuel Akaro, Director of Financial Markets at BoT, highlighted that some individuals have been making payments for various goods, such as property rentals and school fees, using foreign currencies—practices that will soon be classified as illegal.
BoT is actively educating the public, businesses, banks, and educational institutions regarding these new regulations. Akaro urged citizens to report any violations of the law to the authorities.
“These changes are integral to a broader effort to stabilize Tanzania’s financial system and uphold the integrity of our monetary policy,” he concluded.
