Tanzania introduces new directives on foreign exchange operations
THE Central Bank (BOT) has issued six directives to be adhered by all foreign exchange authorized dealers geared to foster macroeconomic stability and safeguard the stability of the financial system in the country.
A statement issued by BOT Governor, Emmanuel Tutuba said all foreign exchange transactions exceeding 1m US Dollars per transaction in the retail market shall at all times be traded within the interbank foreign exchange market prevailing quoted prices.
“All transactions of a single customer in a day shall be summed up for the purpose of determining this amount,” the statement reads.
Apart from the directive, others are;
- Trading of foreign exchange with international foreign currency brokers who are not licensed in the United Republic of Tanzania is strictly prohibited.
- At all times, foreign exchange dealers are required to strictly observe the procedures for Know Your Customer (KYC) in their undertakings.
- The limit for the exchange Net Open Position (NOP) shall be ten per cent (10%) of core capital and have to be observed at all times.
- All Letters of Credit (LCs) for transit cargoes shall be funded by foreign exchange mobilized from respective destination countries.
Mr Tutuba said that the directives are mandatory and shall be subject to examination and monitoring by BOT and infringement attract penal sanctions as instructed by the Foreign Exchange law.
In addition, he said that the new directives are effective from today (June 1, 2023).
