Private forex traders, whose lucrative currency changing business was rudely halted by recent closures of their outlets, have a reason to smile. Some of them will be allowed back in business if they meet tough regulations by the central bank.
“The forex business is now under strict control. Only those meeting the regulations will be allowed back,” the Prime Minister, Mr Kassim Majaliwa, revealed here Friday.
He said in response to repeated concerns by the business fraternity over the closures that some forex shops would be re-opened after the end of the on-going exercise.
“The Bank of Tanzania (BoT) is finalising new procedures for new licences to private operators of the bureaux de change,” he said when opening a CRDB Bank shareholders.
The Prime Ministers’ assurance followed an appeal made by the Arusha Regional Commissioner, Mr Mrisho Gambo, who admitted that suspension of the outlets had impacted the tourism sector. The RC appealed to the commercial banks, which now offered currency exchange services after the closure of the privately-owned ones, to extend the services to the night in Arusha.
He said Arusha being the gateway for foreign hundreds of tourists and delegates to meetings arriving into the country everyday was short of the forex shops to meet the high demand. The crackdown against forex shops suspected to default the central bank’s regulations started in Arusha in November last year when more than 20 of them rudely closed.
The exercise was extended to Dar es Salaam and other cities and border posts early this year, leaving currency changing business to the commercial banks which opened special windows. The central bank said then that the crackdown targeted suspected masterminds of a syndicate behind money laundering and those operating without licences or abusing their use.
Even those licensed to exchange currency generally violated a host of regulations governing the currency exchange business, mostly engaging in illegal transactions.
Mr Majaliwa did not say when the money bureaux by the private operators would be allowed back to business and new firms licensed under the new regulations.
However, he affirmed only a few of those closed are likely to be licensed to re-open but under tough regulations that would plug loopholes against illegal money transactions.
The minister for Finance and Economic Planning Phillip Mpango said the closing of the foreign exchange operations by the private people was already a blessing in disguise to the commercial banks.
“Banks are now cashing on forex business reducing the impact of liquidity problems”, he said, citing the CRDB Bank which made a profit of Sh. 30.7 billion in the first quarter of this year compared to Sh. 9bn during the same period last year.
Source: The Citizen