Bank of Tanzania stops conversion of Kenyan shilling to local currency in response to Central Bank of Kenya's concerns

Tanzania takes drastic action on conversion of Kenyan shilling to local currency

June 9, 2019 5:51 PM

Bank of Tanzania responds to CBK and the new bank notes

Preident Uhuru Kenyatta with CBK Governor Patrick Njoroge during the launch of new bank notes in Narok

The government of Tanzania has announced that it has stopped the conversion of Kenyan shilling to local currency (Tanzania Shillings).

In a circular dated 07 June, 2019, The Bank of Tanzania disclosed that the move is aimed at combating illicit financial flow.

BoT stated that the decision is also in response to CBK’s move to immediately suspend currency conversion and repatriation of all Kenyan currency.

The memo read in part that “CBK has suspended currency conversion and repatriation of all Kenyan currency to restrict illicit flows into the Republic of Kenya and will not accept Kenyan currency with immediate effect.”

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“Further, the Bank of Tanzania has been advised to freeze CBK Currency Collection Account with immediate effect” adds the memo.

The memo concludes by stating that "Given the gravity of illicit flows concerns raised by CBK, you are required to subject all flows from and into the Republic of Kenya to enhanced due diligence."

Below is the memo: