BoT restates call to halt foreign currency use

DAR ES SALAAM: THE Bank of Tanzania (BoT) has restated its call for stakeholders and the public to refrain from using foreign currencies for domestic transactions, saying that doing so is crucial for the effectiveness of the country’s monetary policy.

BoT’s Manager of International Economics and the Real Sector, Ms Vilela Waane said “There has been significant use of foreign currency within the domestic economy for settling goods and services.

“This is illegal. As a regulator, we urge the public and all stakeholders to discontinue using foreign currencies for domestic transactions, “MS Waane said during a meeting with commercial bank stakeholders yesterday.

She said for the central bank to effectively implement monetary policy, it is better to use a single currency the Tanzanian shilling for domestic transactions, rather than relying on multiple currencies.

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Additionally, Ms Waane noted that the central bank, in collaboration with the Ministry of Finance, is continuing the process of preparing regulations to assist the public and provide further guidance on these changes.

“Once the process is complete and the regulations are finalized, they will be published in the official gazette for public access,” she added.

The central bank emphasised that the use of foreign currencies should remain limited to transactions between Tanzania and foreign countries.

In June of last year, the Minister of Finance, Dr Mwigulu Nchemba amended the central bank act, section 26, declaring it an offence to use foreign currencies for transactions within the country.

In his budget speech to the National Assembly, the finance minister highlighted the negative impact of dollarisation, where both public and private sector institutions demand payments in foreign currency for goods and services provided domestically.

The new directives require all transactions to be conducted and advertised in Tanzanian shillings, aligning with the country’s legal framework and supporting financial stability.

Dr Nchemba also pointed out that some institutions, including government bodies, had been requiring Tanzanians to pay fees, rent, work permits, licenses and other charges in foreign currencies, particularly in US dollars.