The Bank of Tanzania (BOT) has called upon all tourist hotels in the country, ranked three stars and above, to open bureau de change or foreign exchange windows to bring services closer to visitors and minimize black-market business. BOT Governor Emanuel Tutuba made this announcement during a one-day engagement with hoteliers and high-class tourist’ owners on foreign exchange operations, urging them to open the business by July 1st this year.
The aim is to track foreign money not in proper channels, which often ends up in the black market, and to ensure it enters proper channels to meet the current demand for foreign currency, particularly US dollars. The decision to allow Bureau de Change services in hotels follows a review and implementation of the Foreign Exchange (Bureau De Change) Regulations of 2019. Several challenges affecting the provision of foreign exchange services in the country were identified, including investors failing to meet regulatory requirements such as the minimum capital requirement of 1 billion Tanzanian shillings.
The recent regulations have relaxed some requirements, including the reduction of the minimum capital requirement, making it more accessible for Tanzanian investors to open the Bureau de change. Additionally, tourist hotels with ratings of three stars and above are now allowed to provide foreign exchange services to their customers.
Governor Tutuba warned those holding US dollars illegally or hiding them of potential losses in the future, as opening up the Bureau de change business will stabilize the availability of foreign currency. The minimum capital to start a bureau de change is now set at 1 billion shillings for foreigners and 500 million shillings for Tanzanians. For hotels with three-star ratings and above, the capital requirement is 200 million shillings or less.
Despite improvements in the provision of foreign exchange services by commercial banks and licensed bureau de change, challenges still exist, especially regarding availability during evenings, weekends, and holidays. The BOT encourages stakeholders to address these issues to further improve the availability of foreign exchange services in the country.
The BOT will continue to provide financial education to the public on the impact of obtaining foreign exchange services through unauthorized providers and will cooperate with relevant authorities to combat illegal foreign exchange business. Hotels are seen as crucial in tracking foreign money, and the BOT calls for cooperation from stakeholders, including providing information on illegal foreign exchange activities.
Deputy BOT Governor Sauda Kassim Msemo reassured about the country’s economic situation, stating that efforts are being made to ensure sufficient reserves of US dollars and other foreign currencies. She emphasized the importance of cooperation from hotels in reporting illegal activities and highlighted the tourism sector’s significance in driving the economy, particularly in Zanzibar.
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