Dar es Salaam. The Bank of Tanzania (BoT) has intervened in the interbank foreign exchange market, selling $35 million to commercial banks as part of efforts to stabilise liquidity and support broader monetary policy objectives.
The auction, held on May 7, 2025 was conducted under the central bank’s Foreign Exchange Intervention Policy, 2023.
According to a statement issued by the BoT, the weighted average exchange rate for the sale stood at Sh2,697.17 per US dollar, with rates ranging between Sh2,690 and Sh2,700 per dollar.
A total of 21 banks participated in the auction, tendering a combined $62.75 million—more than double the offered amount of $25 million. Of these, 11 banks secured allocations.
Despite the initial offer of $25 million, the BoT sold $35 million following significant demand, reflecting growing pressure in the market and the need to cushion against excessive volatility.
The lowest accepted bid was Sh2,690 per dollar, while the highest successful bid reached Sh2,700. Bids as low as Sh2,620 were rejected.
The central bank said the intervention sought to “enhance liquidity in the foreign exchange market and ensure smooth execution of foreign exchange transactions by economic agents.”
It forms part of ongoing policy actions aimed at curbing inflationary pressures, supporting external trade, and anchoring expectations in the financial sector.
Analysts said the strong demand for dollars highlights persistent demand from importers amid a tightening global financial environment and external trade imbalances.
The injection of liquidity, they noted, is expected to offer relief to businesses reliant on foreign exchange for essential imports and reduce speculative tendencies.
The operation was overseen by the BoT’s Directorate of Financial Markets, which reaffirmed the institution’s commitment to conducting transparent and rule-based market interventions.
It further hinted that additional interventions may be warranted should market conditions continue to warrant such support.
The move comes against the backdrop of continued macroeconomic adjustments and signals the central bank’s readiness to act decisively to ensure the orderly functioning of Tanzania’s foreign exchange market.
