Tanzania central bank warns against dollarisation of local market

Wednesday June 21 2023

Bank of Tanzania. PHOTO | FILE | NMG


In a bid to ease pressure on the local currency, the Bank of Tanzania (BoT) has ordered businesses to stop pricing goods and services using the American dollar, noting they are violating regulatory directives.

The central bank governor, Emmanuel Tutuba, stated that the Tanzanian shilling remains the only legal tender in the country.

The government banned the use of the US dollar in August 2007 and again in December 2017.

“The government’s directives issued are still valid and should be adhered to at all times,” the central bank said in a notice dated June 20.

“Tourists and non-residents who pay in foreign currencies must provide their identification documents such as passport and certificate of incorporation for companies for proper capturing and classification of statistics,” reads the notice.

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Demand for forex has increased in recent months, especially in real estate, health, transport and education sectors as businesses move to cushion themselves against a weakening local currency.

Mr Tutuba has also warned about parallel foreign exchange markets (black market). “It should be noted that institutions registered to determine exchange rates are commercial banks and bureaux de change only,” he said.