Tanzania news, views and interesting items brought to you by TaZnews.
This issue: Updated November 2009
- Currency exchange on the open market
- Changing money in Tanzania
- Keep your cash and valuables safe
Exchanging currency on the open market may not be an option in some countries
What factors determine a country’s ability to exchange money on the open market?
The currency exchange market is an amazing global instrument. It’s the largest financial market in the world; on any given day over $2 trillion is exchanged without it having a fixed location or a regulating body. Exchanges are handled through phone networks and by electronic communication networks. It’s a 24 hour a day business. There’s always a high demand for currency; traders around the globe are meeting or making demands for different currencies constantly.
International trade depends on currency exchanges and so do global businesses and central banks. Central banks have depended on the currency trading market since 1971, when fixed currency markets dissolved due to the elimination of the gold standard. Currencies values now float, rather than being based on the value of gold. Central banks try to stabilize their country’s currency by exchanging it on the open market. Every second of every day a country’s economy is growing or shrinking due to several different factors, which include political and economic stability and global market changes. Banks try to keep a relative value for their currency in relation to the currency of other countries, which helps eliminate the risks of doing business in the world market.
Currency swaps were established to give countries the right to exchange a specific amount of their currency to a foreign currency for a certain price, at some point in the future. These exchanges help countries limit their exposure to sudden and large fluctuations in currency values, which could have a devastating impact on a domestic economy. In order for the system to work effectively, there must be round-the-clock exchanges on the open market.
Exchanging money in Tanzania
How to exchange money in Tanzania?
Some domestic currency, bond and stock exchanges are not too relevant on the international market, so exchanges are not needed beyond the standard business day. A country like Tanzania focuses on their domestic market, so they restrict the import and export of their Shilling to protect its domestic value. Tanzania allows visitors to bring up to $10,000 in cash into the country, but Tanzania Shillings can only be exchanged in banks, airports and currency bureaus within the country. The best rate of exchange is usually offered through a bank. They charge a service fee to make the exchange and they like to exchange U.S. Dollars, so they can use them on the open exchange market to produce a profit.
Tanzania retail locations and hotels do accept other currencies for goods and services, but it’s cheaper to exchange money into Shillings, even when you pay a bank fee. The major cities in Tanzania do have ATM locations, so it’s a good idea to use them instead of using credit cards. Credit cards are only accepted at hotels and some expensive restaurants, so a trip to Tanzania is basically a cash based trip. Traveler’s checks are accepted in Tanzania, but they are not the most economical way to pay for goods and services. Carry one credit card for emergencies and use your ATM card if you need more cash.
Keep your cash and valuables safe
- Make a copy of your passport and keep it in a hotel safe
- Carry cash in a money belt, leg pouch or hidden pocket that’s secure and out of site
- Use the hotel safe instead of carrying large amounts of cash
- Keep small denomination notes and coins in your pocket
- Open your wallet as little as possible in public places
- Keep your emergency numbers for credit cards and traveller cheque seperately
- Leave your expensive watches and jewelry back in your home country
- Take care of your cameras and mobile phones when walking around.
Remember that common sense is your best security weapon when you use it.
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