In a significant move to strengthen its national currency and exert greater control over its financial landscape, Tanzania has officially prohibited the use of foreign currencies for domestic transactions.
The Bank of Tanzania (BoT) announced on May 2nd that all payments for goods and services within the nation must now be conducted in Tanzanian shillings. This directive took effect on March 28th.
Under the new regulations, businesses are no longer permitted to set, advertise, or quote prices using foreign currencies such as the US dollar or the euro.
The BoT emphasized, “Refusal of payments made in Tanzanian shillings is not allowed,” and further clarified that contracts stipulating payments in foreign currencies now face stringent limitations. Agreements established or renewed after the effective date cannot include clauses for foreign currency transactions. Existing contracts may continue under a specified transitional period, although the details of this timeframe have not been publicly disclosed.
Exemptions to this new rule apply to tourists and non-resident individuals, who are still required to exchange their currency through authorized channels like licensed banks and forex bureaus. They also retain the option to use credit or debit cards, as well as mobile payment platforms. This policy shift comes as the Tanzanian shilling navigates challenges in maintaining its stability.
After demonstrating robust performance in the latter half of 2024, appreciating by 9.51% against the US dollar, the shilling experienced a 3.6% decline between April 2024 and April 2025.
The BoT attributed this recent depreciation to typical seasonal variations in the supply of foreign exchange, while underscoring its commitment to a flexible exchange rate system.
“The central bank’s intervention is reserved for instances where necessary to ensure orderly market conditions,” the BoT stated.
Despite recent fluctuations, Tanzania’s foreign exchange reserves remain robust, exceeding $5.6 billion at the close of the first quarter of 2025—sufficient to cover 4.5 months of imports. The BoT anticipates this buffer will remain stable in the near future. Looking ahead, the government intends to support the shilling through ongoing purchases of gold and foreign currency, promotion of exports, and policies aimed at substituting imports with local products.
According to the International Monetary Fund, Tanzania’s economy expanded by 5.5% in 2024, characterized by low inflation and improving fiscal health. The IMF projects continued economic growth in 2025, reinforcing the BoT’s optimistic outlook.
