Tanzania is set to regulate the use of foreign currencies for local transactions, with the central bank amending regulations to exclusively use the Tanzanian Shilling for financial transactions within the country. This new initiative aims to protect the country’s monetary policy and is scheduled to be implemented on July 1st.

The Bank of Tanzania (BoT) has made amendments to allow for the use of the local currency for financial transactions within its borders.

In collaboration with the Ministry of Finance, the Bank is developing new regulations to prohibit the use of foreign currencies for conducting business in the nation.

Villela Waane, Manager of International Economics and Real Sector at the BoT, explained that using foreign currencies domestically limits the supply of foreign currencies needed for importing essential goods, undermines the country’s monetary policies, and adds to inflationary pressures.

The aim is to strengthen the Tanzania Shilling’s value and ensure foreign currencies are reserved solely for essential imports.

Commercial banks have been directed to halt the use of foreign currencies for services, including payment of goods and services, taxes, and other fees. Emmanuel Akaro, Director of Financial Markets at the central bank, noted that paying for goods and services in foreign currencies is now considered illegal.

These changes are part of a broader effort to stabilize Tanzania’s financial system and maintain the integrity of its monetary policies.