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Tanzania Enhances Measures to Ease US Dollar Scarcity, Official Says
Tanzania Enhances Measures to Ease US Dollar Scarcity, Official Says
Sputnik Africa
In May, the Central Bank of Tanzania (BoT) reported that the country experienced a reduction of its foreign currency reserves to $4.9 billion at the end of... 29.08.2023, Sputnik Africa
2023-08-29T11:59+0200
2023-08-29T11:59+0200
2023-08-29T11:59+0200
economy
tanzania
united states (us)
us dollar
crisis
currency
sub-saharan africa
east africa
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Tanzanian authorities intensified measures to alleviate the US dollar shortage in the country, which includes providing export credit guarantee schemes and increasing export by supporting local businesses, the country's Director of Information Services and Chief Government Spokesperson Gerson Msigwa said, according to media.The government is developing schemes to guarantee export credits for goods, being sold outside the country, which means that banks provide loans to traders by making a 50% contribution, Msigwa explained.Among other steps taken by the government, the spokesman mentioned that the country has bought 400 kg of gold by July to reinforce its national reserve. In addition, BoT has been selling large quantities of the US dollars to banks at a discounted price in a bid to drive down exchange rates in the market, the media said.Msigwa also noted that the government provides traders with shillings in exchange for the US dollar and supports forex business (trading on the foreign exchange market) by issuing more licenses for those, who would like to get in the business.Moreover, the official called on Tanzanians to increase efforts in production to raise the country's exports, noting that all transactions should be done in shillings and not in foreign currency.On June 1, Tanzania embarked on a number of measures to restrain the US dollar shortage, including a raft of restrictions on foreign-currency dealings, according to media. In particular, the BoT banned unlicensed international foreign-currency brokers and requested that all forex transactions exceeding $1 million in the retail market were traded within the interbank foreign-exchange market at the prevailing rate.Commenting on the reasons behind the US dollar scarcity in the country, the spokesperson told the media that the crisis stems from several factors, including the Russian special operation in Ukraine, which caused a surge in commodity prices, climate change and the COVID-19 pandemic that disrupted supply chains and affected the overall economic activity.In a bid against the domination of the US dollar in the global trading system, leaders of BRICS at the summit, which took place on August 22-24 in South Africa, have agreed to work on the issue of utilizing currencies that are not subject to geopolitical manipulation and sanctions, Dr. Siyabonga Cyprian Cwele, South Africa's Ambassador to China, told Sputnik Africa.
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economy, tanzania, united states (us), us dollar, crisis, currency, east africa
Tanzania Enhances Measures to Ease US Dollar Scarcity, Official Says
In May, the Central Bank of Tanzania (BoT) reported that the country experienced a reduction of its foreign currency reserves to $4.9 billion at the end of April, from $5.5 billion a year earlier. In order to stabilize the financial situation of the state, in early June, Tanzania's government adopted multiple multifaceted approaches.
Tanzanian authorities intensified measures to alleviate the
US dollar shortage in the country, which includes providing export credit guarantee schemes and increasing export by supporting local businesses, the country's Director of Information Services and Chief Government Spokesperson Gerson Msigwa said, according to media.
The government is developing schemes to guarantee export credits for goods, being sold outside the country, which means that banks provide loans to traders by making a 50% contribution, Msigwa explained.
"The government also supports local traders to produce more quality products in the course of promoting trade and exports," he was quoted by the media as saying.
Among other steps taken by the government, the spokesman mentioned that the country has bought 400 kg of gold by July to reinforce its national reserve. In addition, BoT has been selling large quantities of the US dollars to banks at a discounted price in a bid to drive down exchange rates in the market, the media said.
Msigwa also noted that the government provides traders with shillings in exchange for the US dollar and supports forex business (trading on the foreign exchange market) by issuing more licenses for those, who would like to get in the business.
Moreover, the official called on Tanzanians to increase efforts in production to raise the country's exports, noting that all transactions should be done in shillings and
not in foreign currency.
"Currently, if you go at the port all transactions are done in Tanzania shillings," he added.
On June 1, Tanzania embarked on a number of measures to restrain the US dollar shortage, including a raft of restrictions on foreign-currency dealings, according to media. In particular, the BoT banned unlicensed international foreign-currency brokers and requested that all forex transactions exceeding $1 million in the retail market were traded within the interbank foreign-exchange market at the prevailing rate.
Commenting on the reasons behind the US dollar scarcity in the country, the spokesperson told the media that the crisis stems from several factors, including the
Russian special operation in Ukraine, which caused a surge in commodity prices, climate change and the COVID-19 pandemic that disrupted supply chains and affected the overall economic activity.
In a bid against the domination of the US dollar in the global trading system, leaders of BRICS at the
summit, which took place on August 22-24 in South Africa,
have agreed to work on the issue of utilizing currencies that are not subject to geopolitical manipulation and sanctions, Dr. Siyabonga Cyprian Cwele, South Africa's Ambassador to China, told
Sputnik Africa.
