Trade, mining, energy drive surge in Tanzania's dollar transactions

Dar es Salaam. Trade, mining and oil and energy businesses are emerging as the biggest drivers of Tanzania's retail foreign exchange transactions, as activity in the dollar market has accelerated sharply since the middle of the year.

Data from the Bank of Tanzania (BoT) on the latest weekly retail foreign exchange turnover between August 31 and September 4, 2026 stood at $668.24 million, up from $544.24 million in the preceding week.

Trade accounted for $173.02 million of retail foreign exchange turnover, followed by mining at $114.70 million and oil and energy at $110.79 million.

Individual retail customers ranked fourth with $105.46 million, while agriculture generated $37.15 million and manufacturing $34.56 million.

Transport and communication accounted for $28.97 million, tourism $23.09 million, construction machinery and equipment $17.75 million, NGOs $11.07 million and social services $9.77 million.

The latest figures come as Tanzania's retail foreign exchange market records significantly higher turnover than at the beginning of 2026.

In total, foreign currency purchases stood at $341.27 million, compared with sales of $326.97 million.

The monthly trend is even more striking as retail FX turnover stood at $1.79 billion in January, $1.75 billion in February, $1.76 billion in March, $1.84 billion in April and $1.89 billion in May.

The market then accelerated to $2.54 billion in June, reached $2.69 billion in July, and remained elevated at $2.49 billion in August.

Average monthly turnover during the first five months was about $1.81 billion, compared with approximately $2.57 billion between June and August, an increase of about 42 percent.

Independent financial market analyst Mr Christopher Makombe said the rise in activity in the oil and energy segment could partly be linked to movements in international oil prices.

He said higher prices could increase the dollar value of transactions even when underlying demand for oil remains unchanged.

“If demand remains the same, higher prices can lead to an increased amount traded by the sector,” Mr Makombe said.

The observation is significant for Tanzania, where petroleum products form a major component of the country's import bill.

For companies purchasing fuel and other energy products from international markets, higher global prices can translate into larger dollar-denominated payments without necessarily indicating that more physical volumes have been imported.

This also highlights an important distinction in interpreting the BoT figures: FX turnover measures the value of foreign exchange transactions and should not automatically be treated as net dollar demand or physical imports.

Dollar outlook

While domestic trade and commodity transactions are shaping demand for foreign exchange, global monetary policy could determine the direction of the dollar in the coming weeks. Mr Makombe said the next US Federal Reserve interest-rate decision will be closely watched by currency markets.

The Fed is scheduled to announce its decision on September 16.

“I think this coming Fed decision on US interest rates will be key to explaining the next move for the US dollar,” he said.

He said the decision could determine whether the dollar remains stronger for longer or begins a period of sustained weakness if US interest rates are not raised.

Changes in US interest rates can influence global capital flows and the relative attractiveness of dollar-denominated assets, with implications for currencies in emerging and developing markets.

For Tanzania, movements in the dollar matter to importers, manufacturers, energy companies and other businesses with foreign currency obligations. A stronger dollar can increase the local-currency cost of imported goods and services, while movements in global commodity prices can simultaneously affect the country's foreign exchange requirements.

Trade leads the market

Trade's position at the top of the latest sectoral ranking reflects the importance of businesses engaged in cross-border commerce to Tanzania's foreign exchange market.

Importers require dollars and other currencies to settle payments with overseas suppliers, while exporters receive foreign currency from international buyers.

Mining also has significant foreign exchange exposure through international mineral sales, equipment purchases, services and other cross-border transactions.

The $114.70 million recorded by the mining sector during the latest week places it among the largest sources of retail FX activity.

Oil and energy followed closely at $110.79 million, underscoring the importance of global commodity markets to Tanzania's foreign currency transactions.

Individual retail customers accounted for $105.46 million, showing that foreign exchange activity extends beyond large businesses.

However, the BoT data does not provide enough detail to establish what proportion of individual transactions relates to travel, education, imports, investment or other purposes.

The same caution applies to comparisons between sectors.