BoT outlines directives on foreign operations

 

                            The Bank of Tanzania 

Christian Gaya (HakiPensheni LINK)

The Bank of Tanzania (BoT) has outlined directives on foreign operations to all foreign exchange authorized dealers.

BoT Governor states that as part of the undertaking of its statutory mandate, the BoT has reviewed the...

foreign exchange market operations in consideration of the current market development.

He says that in order to foster macroeconomic stability and safeguard the stability of the financial system in the country, the Bank is reminding all the 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: (i) All Foreign exchange transactions exceeding USD 1,000,000.00 per transaction in the retail market shall at all times be traded within the interbank foreign exchange market prevailing quoted prices.

He reminds that all transactions of a single customer in a day shall be summed up for the purpose of determining this amount,  and  Trading of foreign exchange with international foreign currency brokers who are not licensed in the United Republic of Tanzania he says that is strictly prohibited.

He goes on reminding that at all times, foreign exchange dealers shall be required to strictly observe the procedures for Know Your Customer (KYC) in their undertakings.

The Governor emphasizes that, the limit for the foreign exchange Net Open Position (NOP) shall be ten per cent (10%) of Core Capital and has to be observed at all times.

“All Letters of Credit (LCs) for transit cargoes shall be funded by foreign exchange mobilized from respective destination countries,” BoT Boss mentions.

“It is reiterated that compliance with the requirements stated herein above is mandatory and shall be subject to examination and monitoring by the Bank of Tanzania and infringement attract penal sanctions as provided for in the Foreign Exchange Act, 1992,” Governor emphasizes.

Last but not least, the Governor reminds all foreign exchange authorized dealers that, these directions cancel instructions contained in the Circular that was issued by the Bank on 06th August 2020 with ref. No. IA.248/301/01 F.87. And that the above directives shall take effect from 01st June 2023.