Tanzania has officially banned the use of foreign currencies for local transactions in a move to strengthen the Tanzanian shilling and gain better control over its financial system. This policy aims to promote economic stability and reduce reliance on external currencies within the country.
According to pulse, The new rules, which took effect on March 28, prohibit businesses from setting, advertising, or quoting prices in foreign currencies such as the US dollar or euro.
The Bank of Tanzania (BoT) announced the decision on May 2, confirming that all payments for goods and services within the country must now be made in Tanzanian shillings.
The new rules, which took effect on March 28, prohibit businesses from setting, advertising, or quoting prices in foreign currencies such as the US dollar or euro.
“No one is allowed to reject payments made in Tanzanian shillings,” the BoT stated, adding that contracts denominated in foreign currencies are now subject to strict restrictions.
Agreements signed or renewed after the regulation’s start date cannot include provisions for foreign currency payments. Existing contracts may continue within a defined transitional period, though specifics were not disclosed.
Tourists and non-residents are exempt from the restrictions but must exchange currency through official channels, including licensed banks and forex bureaus.
They can also use credit or debit cards or mobile payment platforms. The move comes as the Tanzanian shilling struggles to maintain stability.
After a strong performance in the second half of 2024, where it gained 9.51% against the US dollar, the shilling declined 3.6% between April 2024 and April 2025.
The BoT attributed the recent depreciation to seasonal fluctuations in foreign exchange supply, stressing its commitment to a flexible exchange rate regime.
“The central bank intervenes only when necessary to maintain orderly market conditions,” it said.
Despite recent volatility, Tanzania’s foreign exchange reserves remain solid, totalling over $5.6 billion at the end of Q1 2025—enough to cover 4.5 months of imports.
The BoT expects this cushion to remain stable in the coming months. Looking ahead, the government plans to support the shilling through continued gold and foreign currency purchases, export promotion, and import substitution policies.
According to the International Monetary Fund, Tanzania’s economy grew by 5.5% in 2024, with low inflation and improving fiscal conditions. The IMF forecasts continued growth in 2025, reinforcing the BoT’s optimism.
