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The Bank of Tanzania recently issued a circular* to all foreign exchange authorised dealers operating in Tanzania, providing directives on foreign exchange operations to foster macroeconomic stability and safeguard the stability of the financial system in Tanzania. This article provides an overview of the circular and the key directives to be complied with.
Under the Foreign Exchange Act, 1992 (the Act), the Bank of Tanzania (BOT) has mandate to formulate, implement and be responsible for monetary policy, including foreign exchange matters in Tanzania. Section 7 of the Act vests the BOT with powers to make regulations, rules, orders, or directions in relation to foreign exchange in Tanzania. The Circular is issued pursuant to this section.
All foreign exchange authorised dealers operating in Tanzania are required to comply with the Circular effective from 7 August 2020 (the Effective Date).
The key directives that must be complied with by all foreign exchange authorised dealers, as set out in the Circular, are:
The BOT continues to monitor foreign exchange operations in Tanzania with the Circular being issued to further ensure that all foreign exchange authorised dealers are conducting their operations in a regulated manner.
In 2019 the BOT cracked down on irregularities in the foreign exchange sector which, among other things, led to a number of bureaux de change operations being suspended and the subsequent passing of the Foreign Exchange (Bureau De Change) Regulations of 2019. You may find out more about these regulations here.
* Bank of Tanzania Circular no. IA.248/301/01 F.87; 6 August 2020
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