BoT injects 25m US dollars to boost liquidity in the interbank forex market
DAR ES SALAAM: THE Bank of Tanzania (BoT) has moved to stabilise the foreign exchange market by selling 25m US dollars through an interbank auction conducted under its 2023 Foreign Exchange Intervention Policy.
In a public notice released, the central bank stated that the intervention aimed to improve liquidity in the Interbank Foreign Exchange Market (IFEM) at a time when demand for the US dollar remains high across various sectors of the economy.
The auction attracted strong interest from commercial banks, with participating institutions tendering a combined total of USD 28.5m US dollars, exceeding the amount offered by the central bank.
Out of 21 banks that submitted bids, 18 were successful.
According to the Bank, the $ 25 million sold in the auction was cleared at a weighted average exchange rate of 2,443.82/- per US dollar.
The highest bid accepted stood at 2,445/-, while the lowest accepted rate was 2,440.25/-. The lowest bid submitted in the entire auction was 2,399/-.
BoT noted that the intervention was necessary to ensure orderly market conditions and maintain confidence among financial institutions operating in the forex market.
“The auction is intended to provide liquidity in the foreign exchange market,” the Directorate of Financial Markets stated in the notice.
The central bank has recently increased its presence in the IFEM as part of broader efforts to support market stability, enhance transparency and ensure a sufficient supply of foreign currency to meet legitimate demand.
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The intervention adds to ongoing measures aimed at aligning forex market operations with macroeconomic stability goals while safeguarding the resilience of Tanzania’s financial system.
