In February 2025, the Tanzania shilling remained broadly stable against the US dollar, with only a slight depreciation from TZS 2,560/USD in January to TZS 2,566/USD, marking a modest 0.23% change. Despite this, the interbank foreign exchange market saw a significant increase in activity, with traded volumes rising by 27.4% from USD 57.2 million to USD 72.9 million. This indicates growing demand for foreign currency—likely for imports or external payments—yet the limited impact on the exchange rate reflects strong macroeconomic management, sufficient forex reserves, and sustained confidence in the Tanzanian economy.

Tanzania Monthly Economic Review – March 2025, the Tanzania shilling (TZS) remained relatively stable against the US dollar (USD) in February 2025, with only slight depreciation observed.

Tanzania Shilling Stability Against the USD – February 2025

Exchange Rate Movement:

• February 2025:
  ➤ TZS 2,566.00 per USD
• January 2025:
  ➤ TZS 2,560.00 per USD

 Change:
➤ The shilling depreciated by TZS 6.00, equivalent to 0.23% over the month.

💡Interpretation: What Does This Mean?

• The Tanzania shilling experienced only marginal depreciation, suggesting strong overall currency stability.
• The interbank foreign exchange market was active, with trading volumes increasing from:
  • USD 57.2 million (Jan 2025) to
  • USD 72.9 million (Feb 2025)
    ➤ Increase of 27.4%, indicating rising demand for USD (possibly for imports or debt servicing).

Despite increased forex demand, the shilling held relatively firm, implying:

• Sufficient foreign exchange reserves by the Bank of Tanzania
• Tight monetary and fiscal coordination
• Controlled inflation and disciplined currency management

Summary Table: Shilling vs. USD

The Tanzania shilling remains broadly stable against the US dollar, with only slight depreciation in February 2025 despite increased foreign exchange market activity. This reflects confidence in macroeconomic fundamentals and effective monetary policy management by the Bank of Tanzania.

Tanzania shilling's stability against the US dollar:

What It Tells Us:

1. The Tanzania Shilling Is Stable
   – The exchange rate changed only slightly from TZS 2,560/USD in January to TZS 2,566/USD in February 2025, a depreciation of just 0.23%.
   ➤ This signals that the shilling is not under heavy pressure and is being well-managed by the Bank of Tanzania.
2. Market Demand for USD Is Growing
   – Foreign exchange trading in the interbank market increased from USD 57.2 million to USD 72.9 million—a 27.4% increase.
   ➤ This could reflect rising imports, seasonal corporate demand, or external obligations (like debt service or payments for goods and services).
3. Despite Demand, the Currency Held Steady
   – Even with the increased demand for dollars, the shilling did not weaken significantly.
   ➤ This shows strong supply-side support, likely through foreign reserves or intervention by the central bank.
4. Investor and Market Confidence Remains High
   – A stable exchange rate in the face of higher forex demand typically means:
   • Inflation is under control
   • Interest rates are appropriate
   • The external sector is resilient

✅ Bottom Line:

The slight movement in the exchange rate tells us the Tanzania shilling is stable and well-supported, even as demand for USD rises. This reflects sound economic management, confidence in the local currency, and a resilient foreign exchange system.