BoT intensifies intervention to stabilise shilling amid high dollar demand

Demand was strong, with 26 banks submitting bids worth $34.75 million—more than double the amount offered—and 14 banks securing allocations.

Responding to continued demand, the central bank increased its supply on Monday this week, selling $20 million. The move led to an immediate appreciation of the shilling, as the weighted average rate strengthened to Sh2,465.13 per dollar.

Despite the injection, dollar appetite remained robust, with 23 banks tendering bids totalling $29.5 million. Again, 14 banks were successful, according to BoT data.

BoT governor Emmanuel Tutuba said the interventions are part of the bank’s regular liquidity management operations aimed at ensuring stability in the financial system.

“As the Bank of Tanzania, our core mandate is to regulate the economy, which includes ensuring there is adequate liquidity within the financial system,” he said.

“We constantly assess market conditions to determine whether to inject or withdraw liquidity, depending on what is needed to maintain balance.”

Mr Tutuba added that the BoT continuously monitors the balance positions of commercial banks to ensure smooth market operations.

“We will continue to closely track market demand and the movement of the shilling to ensure stability and orderly functioning of the foreign exchange market,” he said.

The consecutive interventions mark some of the most active episodes in Tanzania’s forex market this year, underscoring the BoT’s readiness to act swiftly in response to market pressures.

The stronger exchange rate recorded in Monday’s auction also suggests that dollar demand has begun to ease following the injections.

The shilling has remained largely stable throughout 2025, supported by rising export earnings from gold, gas and tourism.

Inflation has stayed within the BoT’s target range of 3–5 percent, while foreign reserves continue to cover more than four months of imports, according to official data.

Amid ongoing global dollar strength and high import bills weighing on frontier markets, the BoT’s timely interventions signal its commitment to maintaining market confidence and currency stability through transparent and proactive measures