In a bid to ease pressure on the local currency, the Bank of Tanzania (BoT) has issued a directive instructing firms operating within the country to comply with regulations and discontinue pricing their products and services in dollars.
The move comes as the Tanzanian shilling faces challenges in maintaining stability amid global economic fluctuations.
For it to reduce its dependency on the US dollar and align with the continent-wide movement toward de-dollarization, Tanzania is actively exploring alternative measures for conducting business transactions in local currencies.
This move signifies the government’s commitment to fostering economic autonomy and strengthening regional financial stability.
According to Emmanuel Tutuba, the governor of the central bank, the Tanzanian shilling remains the sole legal tender in the country. In both August 2007 and December 2017, the Tanzanian government prohibited the use of the US currency.
In a notice dated June 20, the central bank emphasized that the government’s directives remain in effect and should be followed without exception.
According to the notice, individuals who are tourists or non-residents and make payments using foreign currencies must furnish their identification documents, such as passports and certificates of incorporation for companies. This requirement ensures proper capturing and classification of statistics.
In an effort to maintain stability in its domestic currency and regulate the financial landscape, Tanzanian authorities have implemented reinforced measures to curb the use of US dollars within the country.
Tanzania has taken decisive action in response to a recent surge in foreign exchange demand, with the government reinforcing the ban on the usage of US currency and issuing a stern warning against engaging in unregulated foreign currency markets.
The move comes as a response to an unprecedented increase in foreign exchange demand, which has raised concerns among policymakers and necessitated swift action.
The ban on US currency usage seeks to mitigate potential risks associated with relying heavily on a foreign currency, promoting the use of the Tanzanian shilling instead.
By bolstering the local currency, the government aims to enhance economic sovereignty and maintain control over monetary policies that directly impact the nation’s financial well-being.
Also, the chief of the central bank has raised concerns about unregulated foreign currency markets, emphasizing that exchange rate determination should be the sole responsibility of registered institutions such as commercial banks and bureaux de change.
This comes at a time when money African nations are currently contending with the challenge of dwindling foreign exchange reserves, primarily due to the implementation of stricter monetary policies on a global scale.
The decrease in reserves has compelled these countries to reassess their strategies for navigating forthcoming economic trends while simultaneously maintaining a harmonious trade balance.
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