Post by JAMES8200MWAKISYALA on Sept 21, 2010 1:08:15 GMT 4
DAR ES SALAAM, TANZANIA - The Tanzania Government has accumulated foreign exchange reserves of US$3.7 billion enough for four months of imports, even as the country struggles to recover from the negative effects of the global financial crisis.
This increase is better compared to foreign exchange reserves as at December 2009 when it stood at $3.551 billion, according to the CIA World Factbook records.
The current foreign exchange status was revealed last week in Dar es Salaam by the Director of Economic Research and Policy, Dr Joseph Masawe in his remarks to the Stanbic Bank Tanzania 'Customers Economic Forum'.
He was closing a breakfast session in dar es Salaam. that was convened for customers, bankers and economists to discuss the current financial and economic situation and trend in Tanzania, the East African Community region, and global influences of the EAC region.
Dr Masawe said Tanzania's economy had recovered quicker from the global crisis than was anticipated. He said while the Gross Domestic Product (GDP) had grown to 7% by 2008, and had been projected the Gross Domestic Product (GDP) to drop 5%, Tanzania has managed a 6% GDP growth.
Inflation has also continued to drop from over 30% in 1995 down to a single digit. It was 6.3% in June 2010. Inflation in Tanzania is mainly driven by the food situation.
Overall, Dr Masawe said Tanzania's economy has performed better than many neighbouring countries, and the Tanzania shilling has been appreciating against stronger currencies of UK, USA and Europe much to the pleasure of exporters.
As a result the Bank of Tanzania (BoT) which used to intervene in the foreign exchange market, hasn't intervened to stabilize the foreign exchange rates.
In an effort to strengthen Tanzania's financial sector, Dr Masawe said the BoT has completed the second generation of financial reforms which now await Government approval.
Tanzania began its first generation of financial reforms in the early 1990s with the liberalization of the banking sector which had hitherto dominated by state-owned banks.
It allowed private banks to operate, let foreign exchange rates to be determined by the market, and de-criminalized possession of foreign currencies.
Now the BoT says it has embarked on the second generation financial reforms to ensure vibrant primary and secondary markets, to consolidate the pension funds sector, provide for long term financial sector, institute close supervision of the banking sector to ensure the sector operates under secure and strict environment.
Masawe also said the BoT was working on raising the Minimum Reserve levels for commercial banks, and working on an enabling environment to licence big commercial banks.
In a bid to raise the financial positions of municipalities, the BoT is in the process of introducing municipal bonds to enable local authorities to borrow from the public for long term projects instead of waiting for financial subsidies from the Central Government.
Masawe said a consultant was hired to study the feasibility of establishing the municipal bonds and the first draft report was presented to stakeholders in August 2010.
However he said that was the initial stage to be followed by refinement of the draft report for subsequent cabinet approval.
tion and trend in Tanzania, the East African Community region, and global influences of the EAC region.
Dr Masawe said Tanzania's economy had recovered quicker from the global crisis than was anticipated. He said while the Gross Domestic Product (GDP) had grown to 7% by 2008, and had been projected the Gross Domestic Product (GDP) to drop 5%, Tanzania has managed a 6% GDP growth.
Inflation has also continued to drop from over 30% in 1995 down to a single digit. It was 6.3% in June 2010. Inflation in Tanzania is mainly driven by the food situation.
Overall, Dr Masawe said Tanzania's economy has performed better than many neighbouring countries, and the Tanzania shilling has been appreciating against stronger currencies of UK, USA and Europe much to the pleasure of exporters.
As a result the Bank of Tanzania (BoT) which used to intervene in the foreign exchange market, hasn't intervened to stabilize the foreign exchange rates.
In an effort to strengthen Tanzania's financial sector, Dr Masawe said the BoT has completed the second generation of financial reforms which now await Government approval.
Tanzania began its first generation of financial reforms in the early 1990s with the liberalization of the banking sector which had hitherto dominated by state-owned banks.
It allowed private banks to operate, let foreign exchange rates to be determined by the market, and de-criminalized possession of foreign currencies.
Now the BoT says it has embarked on the second generation financial reforms to ensure vibrant primary and secondary markets.