The Bank of Tanzania (BoT) has issued new directives aimed at controlling foreign exchange trading in the country a directive that comes at a time when several African countries are struggling with the...
dollar shortage including KenyaThe directive was issued by BoT
Governor Emmanuel Tutuba and takes effect from today, Thursday, June 1, 2023.
The new controls impact the retail
market, stating that all foreign exchange transactions exceeding $1 million per
transaction shall at all times be traded within the inter-bank foreign exchange
market at prevailing quoted prices.
The directives have tightened the
noose on unlicensed international foreign currency brokers operating in
Tanzania, prohibiting them from purchasing or selling currency in the country.
There's also a cap on Forex Net Open
Position (NOP), which is now bench marked at 10 percent of core capital.
Tanzania's foreign exchange reserves
have taken a hit, falling to $4.9 billion at the end of April 2023 from $5.5
billion a year ago.
However, the government says
there's no need to worry as there's enough Forex for imports for up to 4–5
months.
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