What Is the TZS (Tanzanian Shilling)?
The Tanzanian Shilling (TZS) is the official currency for United Republic of Tanzania located in eastern Africa. TZS is issued and managed by the Central Bank of Tanzania or in Swahili, the Benki Kuu Ya Tanzania. As of August 2020, 1 U.S. dollar is equal to 2,325 TZS.
The Tanzanian shilling is made up of 100 senti, Swahili for cents. In written form, it appears as x/y with the x as the number of shillings, and y as the amount of senti. For example, 25 shillings would be written as 25/- or 25/=, while 25 senti would appear as -/25 or =/25. 1 schilling, 52 senti would be denoted 1/52.
- The Tanzanian shilling (TZS) is the currency of United Republic of Tanzania, replacing the East African shilling in 1966.
- 1 shilling is composed of 100 senti, with banknotes and coins in circulation in denominations of 500 up to 10,000 shilling.
- The value of the Tanzanian shilling is determined by the forex markets as it is a free floating currency.
Understanding the TZS (Tanzanian Shilling)
The Tanzanian shilling, or shilingi in Swahili, is the official currency of United Republic of Tanzania. It is a free floating currency, not pegged to any other monetary unit. Note that the U.S. dollar is also widely accepted throughout Tanzania.
The Tanzania shilling (TZS) has been in use since 1966 when it replaced the East African shilling at par, or at the ratio of 1:1. Prior to the adoption of the Tanzanian shilling, other currencies circulated in Tanzania, including the East African florin, the East African rupee, the East African shilling, the Zanzibari rupee, the Zanzibari ryal, and the German East African rupie.
Initially, the Tanzanian shilling circulated in denominations of 5, 20 and 50 senti, as well as 1 shilling. The 5-senti coin is bronze, the 20-senti is nickel-brass, and the half-shilling and one-shilling coins are cupro-nickel. Currently, the Tanzanian shilling circulates in both coin and banknote form.
Coins have denominations of 50, 100, 200 and 500 shilingi. The current series of coins are all made from brass, except for the 500 shilling, which is nickel-plated steel. Banknotes currently in circulation have 500, 1000, 2000, 5000 and 10,000 shilingi denominations.
According to World Bank data, Tanzania has a growing urban population. However, rural areas still struggle with hunger. The country experiences a 3.5% annual inflation rate and had gross domestic product (GDP) growth of a 6.8% in 2019, the most current year of available data.
History of the Tanzanian Shilling
The modern nation of Tanzania is made up of two distinct areas which united in 1961 to 1962 to form the United Republic of Tanzania. During the colonial period, Tanzania is known as Tanganyika with the Zanzibar neighbor seen as another region. During the early- to mid-1800s, the Zanzibar region of Tanzania was the center of the Arab slave trade, with most of the population enslaved.
In the Zanzibar region, the official currency was the Zanzibari ryal, which was in use until 1908. In 1908, the Zanzibari rupee replaced the ryal, with one ryal equaling two rupees, with final redemption coming in January 1936. Alongside the Zanzibari currencies, the East African rupee was also in use in Tanzania. The East African rupee was a form of money used across all British East Africa colonies and protectorates. It was used in Tanzania between 1906 and 1921 when it was replaced with the East African florin. The florin was itself replaced in 1921 by the East African Shilling. Five years after independence in 1961, the Tanzanian shilling replaced the East African shilling as the nation’s official currency.
In 1882, Tanzania came under German colonial rule as part of German East Africa. Portions of this area were awarded to Great Britain, Belgium, and Portugal after World War I. During Britain's involvement in World War II, the area became an important food source for area forces. However, due to the demand for supplies during World War II, the region experienced massive inflation. The end to British rule came in December 1961 and the area transitioned into a democratic republic. Tanganyika merged with Zanzibar and became the United Republic of Tanzania, taking parts of each region's name to form the new.
In 1967, political leadership became committed to socialism, and nationalization of the nation's industries and banks took place. China became, and remains, an ardent supporter of the region and helped finance infrastructure projects. By the mid-1980s, national debt forced the country to borrow from the International Monetary Fund (IMF). This time also saw the beginning of reforms in the country. Reforms led to the loosening of the one-party political control and saw advancements in the welfare of the public.