Governor: Foreign reserves rise 24 pc

DAR ES SALAAM: FOREIGN exchange reserves increased by about 24 per cent at the end of June, supported by monetised gold held at the Bank of England as the central bank accelerated efforts to diversify its reserve assets and strengthen external financial buffers.

The reserves rose to 6.8 billion US dollars at the end of June from 5.5 billion US dollars a month earlier, enough to cover about five months of projected imports of goods and services, reflecting the growing contribution of gold to the Bank of Tanzania’s reserve management strategy.

The monetised gold has been incorporated into the Bank of Tanzania’s (BoT) official reserve management operations, strengthening the country’s external financial buffers and enhancing its ability to respond to foreign exchange pressures and global market volatility.

The move forms part of the central bank’s strategy to diversify international reserves beyond conventional financial assets, with gold becoming an increasingly important component of Tanzania’s reserve portfolio.

Bank of Tanzania Governor, Mr Emmanuel Tutuba said the country’s gold reserves have surged by about 271 per cent to 29 tonnes as of July this year. Of the total, 10.6 tonnes have been deposited at the Bank of England and monetised, while the remaining 18.5 tonnes are being held in BoT vaults in Tanzania.

“As of now, we have accumulated 29 tonnes of refined gold, with 10.6 tonnes deposited at the Bank of England and the rest stored in Tanzania,” Mr Tutuba said during an exclusive television interview in Dodoma.

He said the gold held at the Bank of England had already been monetised and incorporated into the central bank’s reserve management operations, while additional gold stored in Tanzania has yet to be monetised because local refineries are still awaiting accreditation from the London Bullion Market Association (LBMA).

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Mr Tutuba said the BoT would continue purchasing domestically produced gold at market prices under its reserve accumulation programme, with sales only taking place when foreign exchange needs arise or market conditions justify such action.

According to the BoT’s latest Statement of Financial Position, bullion holdings rose by 4.0 per cent to 6.07tri/- at the end of June from 5.84tri/- in May, while monetary gold increased by 9.9 per cent to 3.45tri/- from 3.14tri/- over the same period.

The increase helped lift the central bank’s total assets by 1.2 per cent to 32.11tri/-. Economist and investment banker, Dr Hildebrand Shayo said expanding gold holdings would strengthen the central bank’s balance sheet and improve the diversification of Tanzania’s international reserves.

He said larger gold reserves provide a stronger buffer against geopolitical tensions, financial market volatility and exchange-rate pressures, helping preserve confidence in the economy and enhance the country’s resilience to external shocks.