The November 2018 closure of forex shops in Dar es Salaam by the government implicated 82 out the 87 forex shops in money laundering among other violations of the law.
So far, over 50 forex shops in the commercial capital have not opened business for weeks after the Bank of Tanzania (BoT) opened an impromptu inspection into their undertakings. Preliminary findings by the regulator found out that some of these businesses were flouting the law, regulations and procedures associated with the money changing business.
The BoT governor, Professor Florens Luoga stated that the ongoing probe has revealed a lot of rot, noting that a final report on the matter will be issued once the exercise is completed. The governor specified that only five of the 87 forex shops in Dar es Salaam were operating within the law and the rest were associated with money laundering.
The governor made the statement at a press conference convened by the Minister of Finance and Planning, Dr. Philip Mpango to brief reporters on the ongoing crackdown of forex shops in Arusha and Dar es Salaam.
The minister stated that the inspection revealed there were a lot of transactions from the formal money system to unlawful system, thus elements of money laundering weakening the local currency and among other actions threatening the national security. The minister further stated that some of the shops were found to spend a lot Tanzanian shillings buying foreign currencies, but few reports were found on how the foreign money left. He also insisted that the inspection was in line with national laws, contrary to complaints from some people that the exercise was against the law and was a violation of the traders` rights.
Speaking on the effects of the inspection, he said the shilling has slightly gained strength rising from Tshs.2450 against the dollar at the onset of the inspections to an average Tshs.2300 currently. At the same time, commercial banks have also increased their daily collection of foreign currencies reaching Tshs.34.5 billion ($15 million) per day. The minister hoped that through the government`s control of the business, commercial banks and other financial institutions in the country would trade more foreign currencies thus increasing their stock. He also dispelled speculations that the government carried out the crackdown because it lacked foreign currency in its coffers.
Source: The Exchange