Tanzania: Circular No. 1

This circular, issued to all banks in Tanzania, details policy and policy implications for reserves against deposits and borrowings. The circular is divided into four sections:

• Section I: outlines the general policy and offers its interpretation;
• Section II: states that all banks are required to maintain minimum reserves equivalent to 10% of the outstanding balance of their total deposits, and that they should hold their minimum required reserves in local currency only;
• Section III: lists the norms for calculation of reserves, submission of reports and penalty;
• Section IV: discusses the repealing clause and the effective date.

Finally, the circular provides two forms on:

• Weekly report on required and available reserves against total deposits and borrowings from the general public;
• Weekly report on government deposits.