Tanzania bans use of foreign currencies for local transactions
In addition to the general ban on foreign currency transactions, the regulations also place restrictions on contracts that were signed in foreign currencies. These contracts must be amended within one year to align with the new law.
Tanzania has banned the use of foreign currencies for local transactions, requiring all goods and services to be priced and paid for in Tanzanian Shillings (TZS).
This new regulation mandates that individuals, businesses, and traders cannot quote or accept payments in US dollars, Kenyan shillings, or any other foreign currency.
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The Bank of Tanzania (BoT) issued this directive, citing the provisions of Section 26 of the Bank of Tanzania Act, 2006. According to a statement from the BoT, the new regulations state that pricing and payment for goods and services within Tanzania must be made in Tanzanian Shillings.
“It is an offence to quote, advertise, or indicate prices in foreign currency, to compel, facilitate, or accept payment in foreign currency, or to refuse payment made in Tanzanian Shillings,” the statement added.
In addition to the general ban on foreign currency transactions, the regulations also place restrictions on contracts that were signed in foreign currencies. These contracts must be amended within one year to align with the new law.
The government has also emphasised that certain foreign currency transactions will still be allowed, such as contributions to regional organisations, transactions involving embassies, and dealings with international organisations.
Tourists and foreigners visiting Tanzania are still able to exchange foreign currencies at commercial banks or Bureau de Change outlets.
Additionally, foreigners can continue to use digital payment methods, including bank cards, for their transactions. However, businesses and individuals in Tanzania must ensure all pricing and payments are made in Tanzanian Shillings.
For Kenyan traders and companies doing business in Tanzania, this regulation will require them to exchange their money for Tanzanian Shillings before completing transactions.
This change may lead to challenges, especially for traders dealing with fluctuating exchange rates, as Kenyan shillings will now need to be converted into Tanzanian shillings.
Moreover, Kenyan companies that had previously priced goods or signed contracts in foreign currencies will need to adjust their operations to comply with the new law.
The Bank of Tanzania has urged Tanzanians to report any violations of these regulations. The goal is to promote the use of the local currency and stabilise the country’s economy.
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