• Tanzania will now require all local transactions to be priced and paid in Tanzanian shillings.

• Foreign currency contracts face tighter restrictions, and tourists must use official channels to convert money.

• The move comes as the shilling weakens in 2025 after being one of the world’s strongest currencies in late 2024.

Tanzania has banned the use of foreign currencies for buying and selling goods and services inside the country. The Bank of Tanzania (BoT) announced the measure on May 2, stating that from now on, all domestic transactions must be carried out in Tanzanian shillings.

The ban is part of new government regulations that came into effect on March 28. These rules make it illegal to set, advertise, or quote prices in foreign currencies. Businesses can no longer accept or ask for payment in dollars, euros, or any other foreign currency. They are also not allowed to turn down payments made in Tanzanian shillings.

The restrictions go beyond day-to-day sales. Contracts written in foreign currencies are now subject to strict limits. Companies are no longer allowed to sign or renew agreements that require payments in foreign currencies after March 28. Any existing contracts in dollars or other currencies will be allowed only within a defined timeframe.

Tourists and foreigners are still allowed to use foreign currencies—but only through official channels. They must exchange their money at licensed banks or forex bureaus. They can also pay using credit or debit cards, or mobile payment systems.

This policy shift comes as the Tanzanian shilling experiences a sharp turn in its performance. While the currency strengthened by 9.51% between July and December 2024—making it the world’s top-performing currency in that period—it has since lost ground. Between April 2024 and April 2025, the shilling fell 3.6% against the dollar.

The Bank of Tanzania attributes this recent decline to seasonal changes in foreign exchange flows, along with its flexible exchange rate policy. The central bank allows the shilling’s value to move based on supply and demand, stepping in only when necessary.

Despite this, Tanzania’s foreign exchange reserves remain strong. At the end of the first quarter of 2025, the country held more than $5.6 billion in reserves, enough to cover 4.5 months of imports. The BoT expects the level to remain stable through the second quarter.

To strengthen reserves in the longer term, the central bank plans to continue buying gold and foreign exchange on the open market. It also aims to boost exports and promote import substitution—replacing imported goods with local alternatives.

The country’s broader economic outlook is positive. The International Monetary Fund reports that Tanzania’s economy grew by 5.5% in 2024, driven by better fiscal and external balances. Inflation stayed low at 3.1% on average for the year, well below the Bank of Tanzania’s 5% target. The IMF expects growth to continue in 2025.