Bank of Tanzania issues alert on large number of fake dollars destined for Africa

• The Bank of Tanzania (BoT) is cautioning foreign currency dealers to remain vigilant against counterfeit U.S. dollars.
• Under the updated regulations, forex exchange bureaux will be classified into three distinct categories.
• According to the bank’s recent report, Tanzania’s foreign exchange reserves declined from $5.246 million in July to $5.208 million by the end of August.

Following the release of new regulations by the Bank of Tanzania (BoT) to tighten controls on foreign exchange transactions, prompted by dollar shortages, the central bank is now cautioning foreign currency dealers to remain vigilant against counterfeit U.S. dollars.

In a notice dated October 10, 2023, addressed to commercial banks and Bureau de Change operators, (BoT) revealed that it had received information regarding the confiscation of large amounts of US dollar counterfeit notes in a foreign country, which was destined for the African continent.

BoT has issued a directive to foreign exchange operators, instructing them to take “necessary precautions” which involves reinforcing their systems for the detection of counterfeit currency.

New regulations governing the operations of forex exchange bureaux were officially published on October 6, replacing the previous regulations that had been in effect since 2019, TheEastAfrican reported.

Under the updated regulations, forex exchange bureaux will be classified into three distinct categories based on factors including ownership structure, minimum capital requirements, and the extent of their operational scope.

According to the bank’s most recent monthly economic review report, published on October 12, Tanzania’s foreign exchange reserves experienced a slight decline, dropping from $5.246 million in July to $5.208 million by the end of August.

Despite this decrease, current reserves were still enough to cover 4.7 months of projected imports.

This level remains above the benchmarks set for both the country and the East African Community benchmarks of 4 and 4.5 months respectively, according to the report.

In August, the Inter-Bank Foreign Exchange Market saw an increase in dollar sales, surging from $52.1 million in July to $73.5 million.

The uptick in dollar sales comes as the central bank continues to contend with a rising import bill and escalating demand for foreign currency within the domestic retail market.

Credit: Business Insider Africa