Central Bank of Tanzania Announced Fresh Gold Purchase Plan

SEATTLE (Scrap Monster): The Central Bank of Tanzania announced plans to add gold to its holdings, as part of efforts to boost its foreign exchange reserves. The East African country will add 12 tons of gold during the current fiscal year.

Anthony Mavunde, Minister for Minerals said that it has already allocated funds for purchase of gold from local miners and refiners in Tanzanian currency. It must be noted that the country’s central bank has added 418 kilograms of gold to its reserves so far this year.

The government officials are in discussion with mining industry representatives over a legislation that aims to lower the royalty charged on sale of gold to the bank. Currently, miners are required to pay a higher royalty of 9.3% on gold sales to the central bank, as compared with 7.3% royalty on sale to refineries. The legislation will revise the royalty levied on all gold sales to a uniform rate of 7.3%.

The move to purchase domestically produced gold will not only benefit the miners’ revenues but also contribute positively to the country’s gross domestic product (GDP) growth. By doing so, the government intends to ensure that the money remains in circulation within the country.

The mining industry contributes approximately 56% of Tanzania’s total foreign currency reserves.

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