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East African country, Tanzania has officially banned the use of foreign currencies such as the US dollar and euro for local transactions, a move aimed at strengthening the Tanzanian shilling and enhancing control over the country’s financial system.
The Bank of Tanzania (BoT) announced the new policy on May 2, confirming that as of March 28, all payments for goods and services within the country must be made exclusively in Tanzanian shillings. Businesses are now prohibited from quoting, advertising, or setting prices in any foreign currency.
In its statement, the BoT emphasized that “no one is allowed to reject payments made in Tanzanian shillings.” Additionally, contracts signed or renewed after March 28 must be denominated in the local currency. While existing agreements involving foreign currencies will be allowed to continue for a limited transition period, the central bank has yet to specify the duration.
Tourists and other non-residents are exempt from the restrictions. However, they must convert their foreign currency through authorized channels such as licensed banks and forex bureaus. They can also make payments via credit/debit cards or mobile platforms.
This policy shift comes amid challenges for the Tanzanian shilling. Despite gaining 9.51% against the US dollar in the latter half of 2024, the currency declined by 3.6% between April 2024 and April 2025. The BoT attributed this to seasonal variations in foreign exchange supply and reaffirmed its commitment to a flexible exchange rate system, intervening only to stabilize market conditions.
Tanzania’s foreign exchange reserves remain robust, standing at over $5.6 billion at the end of Q1 2025—sufficient to cover 4.5 months of imports. The central bank expects reserves to remain stable in the near term.
To further support the shilling, the government plans to continue acquiring gold and foreign currencies, encourage exports, and promote import substitution. The International Monetary Fund reports that Tanzania’s economy grew by 5.5% in 2024, with low inflation and improving fiscal indicators. Continued growth is forecast for 2025, reinforcing confidence in the BoT’s strategy.
