Circular No. 05 on the Foreign Exchange Exposure and Placements, Purchases, Sales and Balances

This paper discusses the Bank of Tanzania Act, 1995 concerned with laws regulating the foreign exchange; it is applicable to all licensed banks and financial institutions in the country. It is divided into five parts.

Part I of the document explains the terminologies used in the Act.

Parts II and III deals with the following:

• General objectives of the Act;
• Eligibility criteria for foreign exchange operations;
• Net open position of the bank and norms regarding the placement of currency with a foreign bank or related organizations;
• Reporting requirements of the bank in case of foreign exchange operations.

Parts IV and V discuss the following:

• Penalties for failure to:
  • Observe the required limits;
  • Submit the returns and misrepresentation of information.
• Revocation of banking license;
• Conditions for suspension of credit facilities and various other activities of the bank.

The paper concludes with the repeal of circular no. 5 on foreign exchange, sales and balances issued on 5th August, 1996.