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United Republic of Tanzania  
  • Mwl. Julius K. Nyerere
  • Sheikh Abeid Amani Karume
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Home Our NationTanzanian CurrencyBanknotes Issues

The currency used in Tanzania is the shilling; whereby since its establishment in 1966, Bank of Tanzania has produced various issues of bank notes and coins following the decision to dissolve the East African Currency Board (EACB) and to establish separate Central Banks in Tanzania, Kenya and Uganda. The Bank of Tanzania Act, 1965, was passed by the National Assembly in December 1965, and the Bank was opened by the first President of Tanzania Mwalimu Julius K. Nyerere on June 14, 1966.

The Act empowered the Bank of Tanzania to perform all the traditional central banking functions. However, within eight months of the inauguration of the Bank, in February 1967, the Arusha Declaration was proclaimed, and, with it, the Bank had to reorient its policies. Most of the traditional instruments of indirect monetary policy stipulated in the Act became inoperative, as there was no longer an environment of the type which exists in a competitive system, where indirect instruments are effective.

The Bank of Tanzania Act was amended in 1978, with the result that additional developmental functions were vested in the Bank. As stipulated in this amendment, the Bank established four special Funds namely, The Rural Finance Fund, The Industrial Finance Fund, The Export Credit Guarantee Fund and The Capital and Interest Subsidy Fund. These funds were formed to provide refinance and to offer guarantee facilities to banks and other financial institutions against their loans and advances to specified sectors of the economy.

The amendment of the Act also shifted responsibility of financial planning from the Ministry responsible for Planning to the Bank; therefore the Bank was empowered to inspect and/or supervise banks and other financial institutions, which had not been the case previously

Source: Government Portal Content Committee, Last Reviewed on : 2015-10-09 15:21:12
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