Bank of Tanzania warns against fake dollars

Days after the Bank of Tanzania (BoT) published new regulations to tighten controls on foreign exchange dealings that were informed by shortages of the dollar, the bank is warning foreign currency dealers to be on the lookout for counterfeit dollars.

In an October 10, 2023 notice to commercial banks and Bureau de Change operators, BoT said it had “received information regarding seizure of large amounts of US dollar counterfeit notes in a foreign country, which were destined for the African continent”.

BoT directed the forex operators to take “necessary precautions”, including strengthening their systems for identifying fake currency notes.

The new regulations for forex shop operations were published on October 6, replacing previous regulations that had been applicable since 2019.

Forex exchange bureaux will now be categorised into three classes, based on factors that include range of ownership, minimum capital requirements, and scope of operations.

In its latest monthly economic review report published on October 12, BoT said Tanzania’s forex reserves had dropped slightly from $5.246 million in July to $5.208 million by the end of August.

Current reserves were still enough to cover 4.7 months of projected imports, which remained above both the country and East African Community benchmarks of 4 and 4.5 months respectively, according to the report.

The Inter-Bank Foreign Exchange Market registered a sharp rise in dollar sales from $52.1 million in July to $73.5 million in August as the central bank continued to grapple with an increasingly inflated import bill and high demand for foreign currency in the domestic retail market.