Tanzania's central bank just dumped $45 million into the foreign exchange market on December 19, 2025, and the scramble was real. Twenty-five banks showed up to fight over dollars. Sixteen walked away winners. The other nine? Better luck next time.
Twenty-five banks battled for dollars. Sixteen scored. Nine went home empty-handed. The forex hunger is absolutely real.
The Bank of Tanzania ran this auction under its 2023 Foreign Exchange Intervention Policy, offering an initial $25 million. Bids poured in totaling $59.75 million. That's demand exceeding supply by a pretty uncomfortable margin. The central bank decided to throw in an extra $20 million, bringing the total to $45 million. Still not enough to satisfy everyone.
The weighted average exchange rate landed at TZS 2,449.80 per dollar. Bids ranged from TZS 2,441 at the low end to TZS 2,450 at the high end. That narrow spread tells you something: the market knows exactly where the shilling stands, and it's not pretty. Near historic lows, actually.
This wasn't even a one-shot deal. BoT conducted two consecutive auctions. The first moved $25 million at TZS 2,443.82 per dollar, with bids hitting $28.5 million. The second pushed $20 million at TZS 2,447.55, facing bids worth $32.25 million. Forty-seven bids got accepted across both sessions. Persistent hunger for hard currency, no question.
Why the desperation? Elevated import bills, especially fuel. Slower external inflows now that tourism peak season has passed. Corporates settling external debts. The usual suspects driving seasonal tightening that hit hard in late November.
BoT operates under a managed-float regime, which basically means they intervene when things get too squirrelly without defending any specific rate. The goal here was smoothing volatility, easing forex liquidity pressures, keeping the market functioning in some orderly fashion. Whether it worked remains debatable. Like Ghana's central bank, Tanzania's BoT uses regulatory functions and direct market interventions as tools to stabilize its currency when market pressures threaten exchange rate stability. The scale and timing of these interventions matter enormously—monetary policy decisions by central banks can either calm markets or signal deeper structural issues with the currency.
There's hope on the horizon, supposedly. Seasonal inflows from tourism and agriculture should pick up soon. Cashew nut auctions intensify between December and January. Dollar earnings historically peak November through February. If those inflows materialize on schedule, pressure might ease. The interest rate differential between the shilling and dollar will continue playing a critical role in determining forward exchange rates and whether forex demand stabilizes or accelerates. If not, expect more interventions. The central bank's playing whack-a-mole with forex demand, and the moles keep popping up.
