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Tanzanian Central Bank Launches Foreign Exchange Reserves Boosting Gold Buying Scheme

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Tanzanian Central Bank Launches Foreign Exchange Reserves Boosting Gold Buying Scheme

The Bank of Tanzania said on Sept. 25 that it has kickstarted an initiative that seeks to boost the country’s foreign exchange reserves by buying gold with local currency. The bank said its objective is to acquire six tonnes of gold from miners and traders in 2023 alone.

The Tanzanian Gold Reserve

The Tanzanian central bank said on Sept. 25 that it had commenced the so-called domestic gold purchasing program which aims to boost the country’s foreign exchange reserves. According to a report in The Chanzo Initiative, the start of the gold-buying program came nearly six months after the Tanzanian government unveiled the process to launch the gold reserve.

In a video update shared a few days before the Sept. 25 announcement, the Bank of Tanzania (BOT) governor Emmanuel Tutuba said the institution had already bought some 418 kilograms of gold. However, the commodity was subsequently sold and the revenues generated have since been transferred to the country’s forex reserves. The central bank’s objective is to acquire six tonnes of gold in 2023, Tutuba reportedly said.

The Foreign Exchange Shortages

As previously reported by Bitcoin.com News, Tanzania has been grappling with shortages of U.S. dollars. To deal with this, the central bank reminded players in the country’s foreign exchange market of their obligations which include dealing with licenced foreign currency brokers. At the time, the central bank said these steps were intended to “foster macroeconomic stability and safeguard the stability of the financial system.”

Meanwhile, in the statement shared via X (formerly Twitter), the Tanzanian central bank said it will use local currency to pay for the gold.

“The Bank of Tanzania wishes to inform the public of the commencement of the domestic gold purchasing program which aims to bolster foreign exchange reserves through acquiring and holding gold. The bank is therefore purchasing gold from domestic miners and traders in Tanzanian shillings,” the read the statement.

The bank added that all stakeholders are invited to partake in the scheme.

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