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Tanzania Reports Steady Foreign Exchange Flows in Q2, Boosted by Gold, Tourism, and Cash Crops

Strategic Insights

— 1 min read

Tanzania's foreign exchange flows have remained stable in the second quarter of the year, driven primarily by the country's gold, tourism, and cash crop sectors. A recent report by the Bank of Tanzania (BoT) highlights the growth of these sectors, which have contributed significantly to the country's economy. The report notes that the enforcement of Section 26 (2) of the Bank of Tanzania Act has led to an increase in foreign currency flows through formal channels, further boosting the country's economic growth.

Key Takeaways:

  • Total bank sales in the interbank foreign exchange market rose to $204.4 million in the second quarter, up from $110.9 million in the first quarter, representing a 5.5% growth.
  • The Bank of Tanzania (BoT) purchased 5.022 tonnes of gold valued at $554 million, surpassing its purchase target of $350 million from three local refining plants.
  • Tourism recorded significant growth, with 2.2 million tourists visiting Tanzania, injecting $3.83 billion into the economy.
  • Cash crop exports brought in combined earnings of $1 billion, with cashew nuts, tobacco, and cotton leading in export volumes.
  • Inflation rates remained low, averaging 3.2% and remaining within the target of 3-5% set by the Southern African Development Community (SADC) and the East African Community (EAC).
  • The ongoing campaign to use the Tanzanian shilling for local transactions is expected to ease the demand for foreign currency and strengthen the shilling.

Statistics:

  • Total bank sales in the interbank foreign exchange market: $204.4 million (Q2) and $110.9 million (Q1)
  • Value of gold purchased by BoT: $554 million (5,022 tonnes)
  • Tourist arrivals: 2.2 million, injecting $3.83 billion into the economy
  • Cash crop exports: $1 billion, with cashew nuts, tobacco, and cotton leading in export volumes
  • Headline inflation rate: 3.2%
  • Foreign exchange liquidity expected to improve in the second half of 2025 due to seasonal crop harvesting and tourist peak season.

Sources:

  • Bank of Tanzania (BoT) Monetary Policy Report for July
  • Source (not specified in the original text)

(Note: The original text does not provide exact source information, so the source has been listed as "Source (not specified)". If more information is provided in the future, please feel free to update the source section accordingly.)

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