BoT: Shilling strengthens amid forex liquidity

ARUSHA: THE Bank of Tanzania (BoT) has reported that foreign exchange liquidity remained adequate in October, supported by inflows from gold exports, cash crops and tourism activities, according to its Monthly Economic Review published last month on its website.

BoT noted that the Inter bank Foreign Exchange Market (IFEM) remained active, with total transactions reaching 93.8 million US dollars (about 227.5bn/-), slightly down from 101.5 million US dollars (about 246.1bn/-) recorded in the previous month.

“Banks accounted for 88.3 per cent of total transactions. The Bank participated in the market, selling 11 million US dollars (about 26.7bn/-) on a net basis, in line with the Foreign Exchange Intervention Policy,” BoT stated.

The review also highlighted that the Tanzanian shilling strengthened against the US dollar, averaging 2,471.69/- per US dollar in September, compared with 2,490.16/- in August.

On an annual basis, the shilling appreciated by 9.4 per cent, compared with 7.6 per cent the previous month and a 10.1 per cent depreciation in the same period last year.

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Regarding the Interbank Cash Market (IBCM), BoT said it continued to facilitate the distribution of shilling liquidity among banks, supporting the transmission of monetary policy.

“In September 2025, total IBCM transactions reached 3,261.6bn/-, up from 2,374.5bn/- in the preceding month,” the report said.

BoT further revealed that 7-day transactions accounted for the largest share, representing over 64.6 per cent of total market turnover.

Reflecting adequate liquidity in the banking system, the overall IBCM interest rate eased slightly to 6.45 per cent from 6.48 per cent in August.