Tanzania Moves to Prohibit Foreign Currency for Local Transactions

Tanzania plans to ban foreign currency for domestic payments, requiring all transactions to be made in Tanzanian Shillings. This policy, effective July 1, aims to strengthen the national currency and protect the economy by preventing the depletion of funds needed for essential imports.

Tanzania is set to prohibit the use of foreign currency for business transactions and other payments within its borders. The government mandates that all transactions must be conducted exclusively in Tanzanian Shillings. In accordance with this directive, the Bank of Tanzania is revising its regulations and collaborating with the Ministry of Finance to establish new laws that will outlaw foreign currencies in local trade. This regulation is anticipated to come into effect on July 1, as reported by Business Insider Africa.

Officials assert that this initiative is designed to bolster the Tanzanian economy. They reason that the use of foreign currency domestically detracts from the funds available for essential imports, diminishes the national currency’s strength, and intensifies inflationary pressures. The Bank of Tanzania has instructed commercial banks to discontinue accepting foreign currencies for various services, including tax payments and other fees.

Under the new regulations, individuals found executing local transactions using foreign currency will face legal repercussions. The Tanzanian government emphasizes that this measure aims to fortify the value of the Tanzanian Shilling and restrict the use of foreign currencies solely to necessary situations, such as acquiring critical imports.

In summary, Tanzania’s government is implementing a ban on foreign currency for local transactions, effective July 1. This strategy is intended to protect its economy by strengthening the Tanzanian Shilling and ensuring that foreign currency is utilized only for essential imports. The Bank of Tanzania is actively engaging with local banks and preparing new regulations to enforce this change.

Original Source: globalsouthworld.com