The Director of Research and Economic Policy at the Bank of Tanzania, Dr. Suleiman Missango, has assured the public that the country has sufficient foreign exchange reserves.

"Despite challenges of availability of foreign exchange in the country, particularly the US dollar, the country’s foreign exchange situation is bearable," said Dr. Missango during an awareness session with media editors in Dar es Salaam.

He attributed the resilience to the continued availability ample foreign exchange reserves in the country, which on August 21, 2023 stood at $5.441 million.

These reserves "cover 4.9 months of imports obligations. The amount is just like the amount the country had before the challenges in the global economy that led to a shortage of foreign exchange," he explained.

Furthermore, the BoT director noted that the central bank continues to use the existing reserves to enhance liquidity in the domestic foreign exchange market.

For instance, he said, "from July to August 21, 2023, the central bank sold $100.5 million in the foreign exchange market, compared to $62 million sold between July to September 2022."

He further said since the start of the Ukraine crisis in March 2022, the central bank has sold $518.5 million in the foreign exchange market.

During the session, which was also attended by representatives from banks and bureaus de change, Dr. Missango stated that both the Government and the central bank are implementing various measures to address the shortage of foreign exchange in the country.

"These measures include the central bank increasing the volume of foreign exchange sales in the foreign exchange market, diversifying sources of foreign exchange, including gold purchases, and strategies to boost exports and produce alternative products to those imported," he said.

He also expressed optimism that the global economy has started to recover, indicating an increase in foreign exchange reserves in the country.

Dr. Missango noted improving global economic growth, which is expected to reach 3 per cent in 2023, compared to the earlier projections of 2.8 per cent. Additionally, global commodity prices have continued to decrease, and inflation rates have decreased in various countries.

"These positive trends in the global economy signal a decrease in the shortage of US dollars in the country. Along with these global developments, Tanzania's economy is also recovering steadily, and there are indications of a reduction in the foreign exchange shortage challenges," he added.

In the meantime, the Bank of Tanzania urges citizens to dismiss unfounded concerns about foreign exchange situation in the country. Additionally, the bank has requested that media outlets provide accurate information to prevent unnecessary fears and panic related to foreign exchange availability.

Traders and citizens have been encouraged to adhere to the laws, guidelines, and regulations regarding foreign exchange, as outlined in the Central Bank's statement on the use of foreign exchange dated June 20, 2023. The statement highlights that proceeds from the sales of goods and services abroad should be deposited in local banks.

Furthermore, the central bank has urged citizens to increase the use of home-made products and services. "This step will reduce the demand for foreign exchange, strengthen economic activities, and boost income for citizens," Dr. Missango said, urging producers to enhance the quality and quantity of domestic products and services to decrease reliance on imports and increase foreign exchange earnings.

During the session, editors had the opportunity to ask questions, which were collectively answered by the central bank and representatives from banks and foreign exchange bureaus.

The foreign exchange shortage in the country, as seen globally, has been caused by factors such as the Russia-Ukraine conflict, the COVID-19 pandemic, climate change, and changes in monetary policy direction to combat global inflation.