In response to recent fluctuations in the currency market, the Bank of Tanzania (BoT) has taken proactive steps to stabilize the Tanzanian shilling against the US dollar. Last week, the central bank sold 100 million US dollars to local commercial banks, with plans for further releases shortly.
Speaking to reporters in Zanzibar during a meeting with hotel proprietors, BoT Governor Mr. Emmanuel Tutuba emphasized the importance of ensuring currency stability amidst global economic challenges. Despite acknowledging a drop in the Tanzanian shilling against the US dollar, Tutuba reassured that Tanzania's economic position remains comparatively robust.
Tutuba outlined several interventions aimed at bolstering the currency market, including the encouragement of more bureaux de change openings and granting hotels permission to conduct foreign exchange transactions. He highlighted recent reforms in forex regulations, indicating a streamlined process for investors interested in the business, with licenses to be issued within five working days.
For local investors, the capital requirements for engaging in forex activities have been delineated, with different grades specifying minimum capital thresholds. Tutuba also cautioned against hoarding foreign currency, warning of potential losses as the BoT takes stringent measures to integrate it into the economy.
In a subsequent statement, the BoT reiterated its commitment to actively participate in the currency market, selling US dollars to commercial banks to alleviate foreign currency shortages. The initiative aims not only to ensure liquidity but also to meet customer demands through licensed financial institutions at prevailing market rates.
The statement emphasized that the BoT's interventions are guided by a Foreign Exchange Intervention Policy, aimed at promoting market stability and meeting legitimate forex needs within the country.
Meanwhile, Governor Tutuba highlighted positive economic indicators, noting a reduction in the current account deficit gap from 5.3 billion Tanzanian shillings in 2022 to 2.7 billion by December last year. He attributed this progress to initiatives such as the Export Credit Guarantee Scheme (ECGS) and Import Substitution Initiatives (ISI), which are instrumental in maintaining stable economic growth.