TANZANIA TARGETS TO CLOSE HALF OF COUNTRY'S 297 FOREX BUREAUS
Tanzania’s recent move to tighten forex controls to tackle financial crimes and protect the local currency will see about half of the country's 297 forex...
Tanzania’s recent move to tighten forex controls to tackle financial crimes and protect the local currency will see about half of the country's 297 forex bureaus go out of business, the central bank said Tuesday.
As at the end of January this year, about 110 bureaux de changes have closed shop, according to the Bank of Tanzania (BoT's) director of banking supervision, Eliamringi Mandari.
"Our expectation is that when the exercise is completed, at least 50 per cent of the bureaux de changes would have stopped operations," Mandari said.
He said the audit of the forex bureaus is expected to be completed in two weeks.
BoT has at the same time relicensed 71 forex traders with another 65 currently under review.
Tanzania has been tightening forex controls to tackle financial crimes and protect the local currency.
In June 2017, BoT raised the minimum capital requirements for the forex bureaus, placed a moratorium on new operations and required all existing traders to apply for new licences.
The capital levels were revised to Tshs300 million ($132,000) from Tshs100 million ($44,000) for bureaus dealing with spot foreign exchange transactions. For those additionally dealing with money transfers the minimum threshold was set at Tshs1 billion ($440,000) up from Tshs250 million ($110,000).
The regulator has also ordered owners of the bureaus to authenticate the source of funds invested in their businesses and doubled the non-interest bearing deposit to $100,000. The deposit is held by BoT as security for money transfer transactions.
"Some could not meet the new capital requirements while others failed to prove whether the amount they wanted to inject in the new capital was genuine or not," Mr Mandari said.