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Tanzania to Strengthen Economy by Banning Foreign Currency for Domestic Transaction

February 11, 2025

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anzania to Strengthen Economy by Banning Foreign Currency for Domestic Transaction

(3 Minutes Read)

Tanzania is implementing regulations to limit the use of foreign currencies for local transactions. The central bank is revising its rules to require the exclusive use of the Tanzanian Shilling for all financial activities within the country. This initiative is set to take effect on July 1, aiming to strengthen the nation’s monetary policy.

The government recently announced updates to the Bank of Tanzania (BoT), ensuring that only the local currency will be used for transactions within its borders. In collaboration with the Ministry of Finance, the BoT is developing regulations that will ban foreign currencies in domestic business dealings. If everything proceeds as planned, the new rules will be enforced on July 1, to enhance the country’s financial stability.

The initiative to exclusively use the Tanzanian Shilling aims to safeguard the nation’s monetary policy. Villela Waane, the Bank of Tanzania’s Manager of International Economics and Real Sector, indicated that the regulations will be made public once finalized. She explained that using foreign currencies domestically limits the availability of these currencies for importing essential goods, undermines monetary policy, and contributes to inflationary pressures. The goal is to strengthen the value of the Tanzanian Shilling and ensure that foreign currencies are reserved for crucial imports.

Currently, the Bank of Tanzania has instructed all commercial banks to cease accepting foreign currencies for their services, including payments for goods, taxes, and fees. Emmanuel Akaro, the Director of Financial Markets at the central bank, stated that making payments in foreign currencies, which had been common among some individuals, is now illegal. These measures are part of a broader effort to stabilise Tanzania’s financial system and uphold the integrity of its monetary policies.