The Bank of Tanzania (BoT) sold 5.1 metric tonnes of gold from its reserves last week, a decision aimed at strengthening the country’s international reserves and stabilizing the Tanzanian shilling amid rising gold prices. BoT Governor Emmanuel Tutuba announced the sale during a press conference in Dar es Salaam, noting that prior to the transaction, the central bank held 35.4 tonnes of gold.
Governor Tutuba emphasized the bank’s adaptive strategy in managing its gold assets, stating, “We continue to buy and sell depending on when the price is favourable. If the price is favourable, we sell on any given day. If the price falls, we do not sell.” This strategy positions gold as a flexible tool for reserve management rather than a static asset.
The central bank began accumulating gold reserves in 2023 with the goal of enhancing its foreign-exchange buffers and alleviating pressure on the Tanzanian shilling. In September 2024, a new directive mandated that gold miners and traders exporting gold must sell at least 20% of their output to the BoT, further enabling proactive management of the country’s gold reserves.
This approach allows the BoT to convert portions of its gold holdings into foreign currency when market conditions are favorable, while also continuing to add to its gold reserves when prices are less advantageous. The dual strategy has positioned gold as a significant element of Tanzania’s reserve framework, particularly with current elevated bullion prices.
The role of gold in Tanzania’s external financial position has increased, as highlighted in the latest monetary policy statement. High gold prices are contributing to foreign-exchange earnings and reserve accumulation. As of September, Tanzania’s foreign-exchange reserves exceeded $6 billion, which is sufficient to cover approximately 4.3 months of imports, surpassing the national minimum requirement of four months.
Governor Tutuba noted that the strategy’s benefits extend beyond the immediate value of gold. It allows the central bank to maintain a flexible reserve asset that can generate foreign exchange through sales, while also ensuring a portion of the country’s mineral wealth remains within the official reserve system. “Our people in the relevant departments are closely monitoring the market and managing the gold reserves actively,” he stated, reinforcing the bank’s commitment to a responsive and balanced approach to reserve management.
