By The Respondents Reporter
The Bank of Tanzania (BoT) has moved to stabilise the foreign exchange market by selling USD 25 million through an interbank auction conducted under its 2023 Foreign Exchange Intervention Policy.
In a public notice released yesterday, the central bank said the intervention aimed at improving liquidity in the Interbank Foreign Exchange Market (IFEM) at a time when demand for the US dollar continues to remain high across various sectors of the economy.
The auction attracted strong interest from commercial banks, with participating institutions tendering a combined total of USD 28.5 million exceeding the amount offered by the central bank. Out of 21 banks that submitted bids, 18 were successful.
According to the Bank, the USD 25 million sold in the auction was cleared at a weighted average exchange rate of TZS 2,443.82 per US dollar.
The highest bid accepted stood at TZS 2,445, while the lowest accepted rate was TZS 2,440.25. The lowest bid submitted in the entire auction was TZS 2,399.
BoT noted that the intervention was necessary to ensure orderly market conditions and maintain confidence among financial institutions operating in the forex market.
“The auction is intended to provide liquidity in the foreign exchange market,” the Directorate of Financial Markets stated in the notice.
The central bank has recently increased its presence in the IFEM as part of broader efforts to support market stability, enhance transparency and ensure sufficient supply of foreign currency to meet legitimate demand.
Yesterday’s intervention adds to ongoing measures aimed at aligning forex market operations with macroeconomic stability goals while safeguarding the resilience of Tanzania’s financial system.