In a bold move to strengthen its local economy, the government of Tanzania has banned the use of foreign currencies like the US dollar and euro for domestic transactions. This new directive, which took effect on March 28, 2025, was formally announced by the Bank of Tanzania (BoT) on May 2.
According to the new policy, all payments for goods and services within Tanzania must now be made strictly in Tanzanian shillings. This means that businesses can no longer quote or advertise prices in any foreign currency.
The BoT emphasized that rejecting payments made in Tanzanian shillings is now prohibited, and any new business contracts must also be written in the local currency. Existing contracts with foreign currency terms may continue, but only for a limited transition period, details of which are yet to be specified.
Why This Matters
This move comes at a time when Tanzania is taking serious steps to protect the value of its currency. Although the shilling performed well in the latter part of 2024—gaining nearly 10% against the US dollar—it has since declined by 3.6% between April 2024 and April 2025.
The Bank of Tanzania noted that these fluctuations are largely seasonal and reassured the public that it will intervene only when necessary to keep the market stable.
Tanzania’s foreign reserves remain strong, standing at over $5.6 billion—enough to cover 4.5 months of imports. The government plans to further support the shilling by promoting local production, boosting exports, and reducing reliance on imports.
What About Tourists?
Tourists and non-residents are not affected in the same way. They can still use foreign currencies but only through licensed banks, forex bureaus, or digital payment platforms like credit and debit cards.
The Bigger Picture
This policy is part of a broader economic vision. With an impressive economic growth rate of 5.5% in 2024, low inflation, and better fiscal management, Tanzania is positioning itself for continued stability and growth in 2025 and beyond, according to the International Monetary Fund (IMF).
By ensuring that its local currency remains the standard for all internal transactions, Tanzania hopes to reinforce national economic identity and give its people greater control over financial outcomes.