The Bank of Tanzania (BOT) has released a set of directives aimed at promoting macroeconomic stability and safeguarding the financial system within the country. In a statement issued by BOT Governor Emmanuel Tutuba, all foreign exchange authorized dealers are reminded to adhere to the requirements outlined under the foreign exchange regime in Tanzania. The directives, effective as of June 1, 2023, are as follows:
1. All foreign exchange transactions exceeding USD 1,000,000.00 per transaction in the retail market must be traded within the interbank foreign exchange market at prevailing quoted prices. The cumulative transactions of a single customer within a day will be considered in determining this threshold. 2. It is strictly prohibited to engage in foreign exchange trading with international foreign currency brokers who are not licensed within the United Republic of Tanzania. 3. Foreign exchange dealers are required to strictly follow the Know Your Customer (KYC) procedures in all their activities. 4. The foreign exchange Net Open Position (NOP) limit must not exceed ten percent (10%) of the dealer's Core Capital and must be maintained at all times. 5. All Letters of Credit (LCs) for transit cargoes must be funded using foreign exchange obtained from the respective destination countries.
Governor Tutuba emphasized that compliance with these directives is mandatory. The BOT will conduct examinations and monitoring to ensure adherence, and any violations will be subject to penal sanctions as provided for in the Foreign Exchange Act of 1992.