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Pursuant to the Bank of Tanzania Act, 2006, the Bank of Tanzania is given the mandate to formulate and implement monetary policies. Given that, the Bank of Tanzania has severally issued circulars and public notices reminding the public to adhere to the legal and regulatory requirements.
The Bank of Tanzania recently issued a public notice (the Public Notice) dated 20 June 2023 reminding the public of the Government’s directive prohibiting the use of foreign currencies for domestic payments of goods and services between residents of the United Republic of Tanzania. The Bank of Tanzania issued the first notice on restrictions for the use of foreign currencies in August 2007, followed by the second notice which was issued ten (10) years later that is in December 2017.
Under the Public Notice, the Bank of Tanzania reminds the public to adhere to the following restrictions:
3. That residents should not be forced or be obliged to make payment to another resident of the United Republic of Tanzania for any good or service in foreign currency.
Prior to the above issuance of the Public Notice, the Bank of Tanzania issued Directives (the Directives) on Foreign Exchange Operations on 31 May 2023 as part of its statutory mandate, which reviewed the foreign exchange market operations in consideration of the current market development. Under the Directives, the Bank of Tanzania reminded the public, (particularly dealers of foreign exchange) to observe the requirements under the foreign exchange regime in the country at all-time which include but are not limited to the following:
Additionally, the Directive has emphasised that compliance is mandatory whereby an infringement shall attract penal sanctions as provided for in the Foreign Exchange Act, 1992. In a statement published recently, the Bank of Tanzania stated that it will continue to collaborate with law enforcement agencies in the country to combat those involved in the unauthorised trading of foreign currencies. The Bank of Tanzania has urged stakeholders in the banking sector to cooperate and report any instances of unauthorised foreign exchange activities.
1. Samiath Mohammed – Principal Associate
2. Maria Raymond Ringia – Trainee Lawyer