The Bank of Tanzania (BoT) has banned the use of foreign currency within its borders. In a statement dated May 2, the BoT said it made the regulations in accordance with the provisions of Section 26 of the Bank of Tanzania Act, 2006.
“The Bank of Tanzania wishes to inform the public that, in accordance with the provisions of Section 26 of the Bank of Tanzania Act, 2006, the Government has issued the Regulations on the Use of Foreign Currency, 2025. The regulations were published in the Government Gazette No. 198, dated 28th March 2025,” read part of the statement.
According to the statement, pricing and payment for all goods and services within the country must be in Tanzanian Shillings under these regulations.
Therefore, it would be 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.
Government of Tanzania Bans Use of Foreign Currency
The regulations also specify transactions that are permitted to be conducted in foreign currency.
Furthermore, the regulations have set a time limit on contracts executed in foreign currency and prohibit entering into or renewing contracts that require payments in foreign currency effective from March 28, 2025.
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Foreigners, including tourists, will be required to exchange foreign currency through commercial banks or the Bureau de Change in Tanzania.
They may also continue making payments using bank cards or other digital payment methods.
Moreover, the Bank of Tanzania urged its citizens to report any violations of these Regulations to relevant institutions.
“The Bank of Tanzania urges the public to report any violations of these Regulations to the Bank through [email protected], the Financial Intelligence Unit (FIU), the Police Force, or any other relevant law enforcement authority for appropriate action.
A copy of the Regulations is attached for reference,” urged the Tanzanian administration.
Why BoT Decided to Ban Use of Foreign Currency
Tanzania’s move to implement a ban on the use of foreign currency for domestic transactions aims to strengthen the Tanzanian Shilling and safeguard the monetary policies.
Bank of Tanzania officials have in the past explained that the regulations seek to address economic challenges caused by the widespread use of foreign currencies.
Speaking to local media in February, Manager of International Economics and Real Sector at the Bank of Tanzania Villela Waane said the widespread use of foreign currency contributed to the foreign reserves challenges that have affected the country’s monetary policies.
“Using foreign currencies domestically limits the supply of foreign reserves needed for importing essential goods. It also undermines our monetary policies and adds to inflationary pressures,” Villela Waane said.
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By mandating the use of the Tanzanian shilling (TZS) for domestic transactions, the government reinforces its role as the sole legal tender to stabilize its value and enhance the country’s economic sovereignty.
Additionally, the ban is intended to enhance the effectiveness of monetary policy. According to Bloomberg, the Tanzanian Shilling is currently exchanging at the rate of 2,687.66 to the US dollar.
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