The Bank of Tanzania (BoT) has started a large gold-buying initiative as part of a strategic drive to support the expansion of the mining industry and strengthen foreign exchange reserves.
The information was made public by Emmanuel Tutuba, the Governor of the Bank of Tanzania (BoT), during his visit to the Geita Gold Refinery and the Mwanza Precious Metals Refinery Co Ltd.
Under the initiative, BoT has already acquired and refined 418 kilogrammes of gold.
“As highlighted in the budget by the Minister for Finance Dr Mwigulu Nchemba, the government has allocated funds for the purchase of gold. This year, our target is to procure six tonnes of gold, both from small-scale, middle-scale, and large-scale miners,” he said.
He also said BoT purchases gold to diversify the country’s foreign exchange reserve and reduce reliance on a single currency.
This diversification intends to safeguard Tanzania’s wealth against currency devaluation or economic stability caused by global shocks.
“Now for the first time, we have both a gold and dollar reserve. Previously, we only had the US dollar as a foreign exchange reserve,” he added.
During recent months, Tanzania just like other economies, has been adversely affected by a decision by America’s Federal Reserve to embark on aggressive rate hikes as a measure to fight domestic inflation in the US economy.