The Bank of Tanzania (BoT) has banned the use of foreign currencies for local transactions, meaning all goods and services must be priced and paid for in Tanzanian Shillings (TZS).
Following the ban, individuals, business owners, and traders cannot quote or accept payments in US dollars, Kenyan shillings, or any other foreign currency.
''The Bank of Tanzania wishes to inform the public that, by 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 statement read in part.
''Under these Regulations, pricing and payment for all goods and services within the country must be in Tanzanian Shillings. Therefore, it is an offense 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,'' the statement continued.
These changes also include placing a restriction on contracts that were signed in foreign currencies. The regulations dictate that contracts in foreign currencies must be amended within one year to comply with the new rules.
Foreigners, including tourists, are required to exchange foreign currencies through commercial banks or Bureau de Change outlets in Tanzania. They may also continue making payments using bank cards or other digital payment methods.
The regulations, however, specify the transactions that are permitted to be conducted in foreign currency. These include government contributions to regional organisations, embassies, and transactions by international organisations.
Other permitted transactions are foreign currency loans from local financial institutions and purchases from duty-free shops.
How will this affect Kenya?
Kenyan traders doing business in Tanzania must now convert their money to Tanzanian shillings before making transactions.
Kenyans visiting Tanzania must exchange their money at banks or forex bureaus before making purchases. Kenyan companies must also adjust their pricing and contracts to comply with the new regulations.
The changes will largely affect traders and businesses who may face losses due to fluctuating exchange rates when converting Kenyan shillings to Tanzanian shillings.
Meanwhile, all foreigners have been advised to comply with these regulations, while Tanzanian locals have been asked to report any violations of these Regulations to the Bank.
