Tanzania Bans Use of Foreign Currencies in Domestic Transactions

Tanzania has recently decided to ban the use of foreign currencies in domestic transactions. This move aims to stabilize the value of the Tanzanian Shilling and safeguard the country's financial policies. The Bank of Tanzania (BoT) and the Ministry of Finance are drafting new regulations, set to take effect from July 1, 2024.

Under these regulations, domestic transactions such as payments for goods and services, taxes, and fees must be conducted exclusively in Tanzanian Shillings. The use of foreign currencies will be restricted to essential imports only. BoT has instructed all commercial banks to halt transactions in foreign currencies and to educate the public about the new regulations.

The primary goal of this measure is to strengthen the national financial system and reduce inflationary pressures. According to BoT, the domestic use of foreign currencies limits the availability of foreign exchange for essential imports and weakens the effectiveness of financial policies.

This restriction will not apply to tourists and non-residents, who will still be allowed to pay for accommodations, travel expenses, visa fees, and other services in foreign currencies.

The move is part of Tanzania’s broader strategy to fortify its economy and stabilize its currency.