The Bank of Tanzania (BoT) has launched an electronic matching system for its interbank foreign exchange market, a move officials say will improve transparency, efficiency and price discovery in the country’s currency trading framework.
The Electronic Matching System (EMS), introduced on Tuesday, is designed to automatically match buy and sell orders in the wholesale foreign exchange market, replacing traditional manual negotiations between market participants.
The central bank said the platform marks a major step in ongoing financial market reforms aimed at modernising Tanzania’s foreign exchange system and strengthening confidence among investors and financial institutions.
BoT Director of Financial Markets Emmanuel Akaro said the system would enhance market discipline and support the development of a more transparent trading environment.
“The platform will strengthen price discovery and provide market participants with a fair and orderly trading environment,” he said.
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“We expect the new platform to enhance market liquidity, improve efficiency in foreign exchange trading and strengthen confidence among market participants.”
The system has been modelled on internationally recognised trading platforms used in developed financial markets and forms part of broader efforts to modernise Tanzania’s financial sector in line with long-term development plans, including Vision 2050.
According to the central bank, 29 out of 32 commercial banks have already joined the platform, with the remaining institutions expected to complete onboarding procedures within the week.
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Under the new arrangement, commercial banks and major exporters will be able to participate directly in the interbank market, while non-bank participants will be allowed to sell foreign currency through the system, with purchases conducted via licensed banks.
The EMS currently supports spot foreign exchange transactions involving the Tanzanian shilling and the US dollar, with settlement completed within two business days.
The minimum transaction size has been set at US$100,000, with subsequent trades required in multiples of that amount.
BoT Deputy Governor Yamungu Kayandabila said the initiative represents a significant milestone in efforts to deepen and modernise Tanzania’s financial markets.
He said the system would improve transparency and efficiency in foreign exchange trading, while strengthening the credibility of the domestic currency market.
Tanzania has in recent years introduced a series of financial sector reforms aimed at narrowing the gap between its markets and more developed economies, including new codes of conduct for forex dealers and updated market regulations.
These reforms have been designed to improve governance, reduce information asymmetry and support more stable exchange rate formation.
Financial experts say the introduction of electronic matching systems can help reduce volatility by ensuring that pricing is determined more systematically through real-time supply and demand dynamics rather than bilateral negotiation.
The ACI Financial Markets Association (ACI FMA) welcomed the development, with Vice-President Catherine Mwita describing the EMS as an important tool for emerging markets seeking to improve liquidity and market efficiency.
She said the system would benefit both liquidity providers and market participants by creating a more structured and efficient trading environment.
The introduction of the EMS comes as Tanzania continues to pursue broader financial sector reforms aimed at attracting foreign investment, strengthening capital markets and supporting economic growth.
Authorities say improved foreign exchange market infrastructure is also critical for facilitating trade, managing external shocks and ensuring stability in cross-border transactions.
The central bank said it remains committed to further modernisation of financial systems as part of efforts to build a more resilient and competitive economy.
