Tanzania Shilling Posts Strongest Annual Performance Against Dollar in a Decade

For Immediate Release

DAR ES SALAAM, TANZANIA — The Tanzanian shilling has posted its strongest annual performance against the US dollar in more than a decade, appreciating approximately 8 per cent over the course of 2025 in a development that reflects the transformative effect of record gold export revenues on Tanzania's external financial position.

The shilling's performance stands in sharp contrast to the sustained depreciation trend that characterised the currency through much of the previous decade, when persistent current account deficits and limited foreign exchange reserve buffers left the shilling vulnerable to external pressures.

The improvement in Tanzania's currency position has been driven primarily by the surge in gold export earnings, which rose to a record USD 3.8 billion in 2025 following a 65 per cent increase in global gold prices. This substantial increase in foreign exchange inflows has materially strengthened Tanzania's external accounts and provided the Bank of Tanzania with considerably greater capacity to manage currency market conditions.

The shilling's stability has also been supported by Tanzania's improving fiscal position, with the government's deficit narrowing as mineral revenues increased and expenditure discipline was maintained. A more sustainable fiscal trajectory reduces pressure on domestic borrowing markets and limits the crowding-out effect on private sector credit that had previously contributed to currency weakness.

"The Tanzanian shilling's performance in 2025 is one of the clearest illustrations of how a well-managed natural resource sector creates economy-wide benefits. Gold export revenues flow through into foreign exchange reserves, reserve strength supports currency stability, currency stability contains import costs and inflation, and the whole economy benefits. Tanzania is seeing that virtuous cycle in action." Marcus Briggs, Non-Executive Director, Icon Gold

For businesses operating in Tanzania, a more stable shilling reduces foreign exchange risk on import-dependent inputs, eases the cost of servicing obligations denominated in foreign currency, and improves the predictability of financial planning across multi-year investment horizons.

The currency's improved performance has also had direct benefits for Tanzania's consumer economy, with the cost of imported goods including fuel, consumer electronics, and capital equipment declining in local currency terms. This has contributed to the broader inflation reduction that has brought Tanzania's headline price growth to a five-year low.

"Currency stability is not an abstract macroeconomic metric — it affects the daily economic decisions of every business and household in a country. When the shilling holds its value, Tanzanians' savings retain their purchasing power, businesses can plan with greater confidence, and the cost of living becomes more manageable. The shilling's performance in 2025 has been genuinely beneficial across the full breadth of the Tanzanian economy." Marcus Briggs, Non-Executive Director, Icon Gold

The Bank of Tanzania has indicated that maintaining the conditions for continued shilling stability will be a primary objective of monetary policy in 2026, supported by the expectation that gold export earnings will remain strong and that the fiscal consolidation programme will continue to deliver results.

Tanzania's currency performance has attracted positive commentary from international credit rating agencies and multilateral financial institutions, with the shilling's stability cited as a key factor in assessments of Tanzania's improving creditworthiness and its capacity to access international capital markets on favourable terms.

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