Tanzania Posts Corporation (TPC) will before end of the month open forex shops in all its offices throughout the country to capitalize on the opportunity following the closure of non compliant money shops. TPC is already underway to establish exchange services in 19 regions that bear the corporation`s offices.
In a statement issued by the corporation, it states it has higher financial capability to offer foreign exchange services in the country adhering to the government`s set rules and regulations to ensure that customers get valuable services.
Currently TPC has eight postal money shops offering foreign exchange services in the country, six of which are operating in Dar es Salaam with the two others in Arusha and Zanzibar. Explaining on the business strategy, TPC stated some of the forex bureaus operated by the corporation have extended operating hours to 6 p.m and are open seven days a week.
TPC is also looking forward to extend the exchange services to major airports in the country as well as border posts of Tunduma, Namanga, Mutukula and others. Recently, Bank of Tanzania (BoT) under the government`s directive conducted a crackdown in different parts of the country so as to identify bureau de change offering foreign exchange services without adhering to the laws, procedures and regulations governing foreign exchange business.
Last week, the BoT initiated a process intended to cancel licenses of bureaux de change in Dar es Salaam which were operating without observing laws, regulations, and procedures governing foreign exchange business as stipulated by the central bank. According to BoT, most of the bureaux de change in the capital were operating without licenses, and since their licences were revoked, most of the forex shops have remained closed since the beginning of this week.
Banks have also utilized the opportunity by holding extensive adverts throughout the mainstream media inviting the public to their forex windows.
East African countries embarked on a campaign to curb illegal forex practices in their economies whereby in November last year Rwanda security forces arrested five unlicensed forex traders. In Rwanda, the law provides that any person who sells or exchanges the national or foreign currency illegally shall be liable to a term of imprisonment of six months to two years and a fine from Rwf200,000 ($224) to Rwf3 million ($3358). In Uganda, the police have been arresting illegal forex dealers since 2015 and several suspects detained, states the Bank of Uganda. Kenya also cautioned investors to be alert of the illegal forex business after the Capital Markets Authority discovered that several dealers were operating without licenses.
It is argued that illegal forex trading stands to trigger inflation in the region and weaken local currencies, which would make imports expensive and further worsen budget deficits for regional economies.
