Currency crises: Are we heading the Russian way?

[Abunuas]

Hili jina la professor limekuwa ni balaa!!
Professor wa IFM! Chuo cha mjini! Professor gani mkuu. Wameamua kujiita, ngoja tuone kama kweli wanastahili.

mkuu namaanisha Professor Beno Ndulu anaayehudumu pale BOT. maana kama pesa yetu inashuka thamani yeye anatakiwa kushauri na kuchukua action pale anapoweza. huwezi kutenganisha kushuka kwa thamani ya hela na Gavana wa central bank.

 

[Zungu Pule]

Simple! Our currency business is like this; You take the USD out to china and elsewhere, you buy toys and the likes. You bring them back for sale, you get back the TZS. Next week again you buy the USD off to china and the cycle goes on, meanwhile you sell nothing to bring in the USD. The exercise simply drains the USD without replenishment.

You have been filling in the gap by injecting in some USD from big brothers, donors, but this time they are saying to you, 'go to hell' tingatinga way. what do you expect?

Ok, you may have accrued something from the mining companies but the norm is that they are not tax payers. Only pay something to politicians and relax. where can you go? Tourism may be, but here is Ebola. With our stupidity integrated with our planning, it is unfortunate that we couldn't properly arrange for proper feeding of the tourism industry where more than 60% of expenditure are destined for air travel and hotels. How comes that we don't have a working national carrier while depending on tourism as the largest forex attractant? Stupidity among higher politician who have turned out to be planners of everything.

Well, but the value of our shilling against USD was depreciating even before donors decided to postpone disbursing aid (According to Mwigulu, they have actually resumed disbursing aid. So, the moratorium was too short to have any serious effect?). That is our currency was depreciating even when we had something to "fill in the gap". No?

 

[Fx Trader]

Well, but the value of our shilling against USD was depreciating even before donors decided to postpone disbursing aid (According to Mwigulu, they have actually resumed disbursing aid. So, the moratorium was too short to have any serious effect?). That is our currency was depreciating even when we had something to "fill in the gap". No?

Friend, our shilling was only gradually depreciating - the shilling had depreciated by around 60 shillings or around 3.7% which can be explained by economic fundamental D I.e. current account deficit and inflation differential.


The MoF did not lie but mislead the public. The funds disbursed were from last year budget. This was later clarified by the donors.

 

[Zungu Pule]

Friend, our shilling was only gradually depreciating - the shilling had depreciated by around 60 shillings or around 3.7% which can be explained by economic fundamental D I.e. current account deficit and inflation differential.


The MoF did not lie but mislead the public. The funds disbursed were from last year budget. This was later clarified by the donors.

I am not exactly sure that I understand what you are saying. Are you saying donors are now working on 2013/14 budget i.e last year budget? Who exactly did the clarification?

 

[TAU 1]

Leo Dollar imeshafikia 1805 kutoka 1600 ilipokuwa miezi kama 3 nyuma.

Ni shida

Poleni sana wa TZ wenzangu!hiki ni kitu kikubwa sana kinachotokea kwa kawaida governor wa BOT angengekwisha waita press na kuelezea pia kutoa tamko nini kama benki kuu ku combert hii hali,lakini hawa jamaa hawajali so long as wako bussy kushibisha matumbo yao na familia zao,mungu ibariki TZ

 

[Fx Trader]

I am not exactly sure that I understand what you are saying. Are you saying donors are now working on 2013/14 budget i.e last year budget? Who exactly did the clarification?

Yes some funds for the previous budget were yet to be disbursed.

 

[Fx Trader]

Exactly, there is no transparency.

 

[erique]

well if you follow the news carefully. Kenya and Uganda have sold dollars in the market. Since they are net importers like us they know that a rapidly depreciating currency is bad for the economy in terms of inflation etc. A gradual depreciation is not a bad thing because it can make our exports competitive. However, a rapid depreciation leads is negative for any economy because it can lead to financial instability (deposits being converted into hard currency).

Historically, we know that Bank of Tanzania is always reactive rather than proactive

But, BoT has been partcipating in the IFEM and selling USD almost everyday.is that not intervation you are talking about??

 

[Zungu Pule]

Yes some funds for the previous budget were yet to be disbursed.

So, they postponed disbursing funds/GBS for 2014/15 (due to escrow scandal) but continued to clear unmet commitments from 2013/2014? Is that how it works? Who is implementing 2013/14 budget now? Weird. Btw, who exactly from the donor community did the clarification you are referring to?

 

[SoNotorious]

Cv ya wazir wa fedha yule mama tunaijua what do you expect???? mtu amesoma vyuo vya kuunga unga kama vya kule bugurun kwa mnyaman mnategema ataelewa mambo ya depreciation!!!

Kikwete enjoys working with the mediocre, there is no fit and proper requirements.

 

[Fx Trader]

Nope. What you need to understand is that Tanzania monetary policy targets money supply and therefore selling a small amount of dollars is a way of.mopping up excess liquidity. They use othet avenues too like t bills and repo.

 

[erique]

atleast the Russian Central Bank took some action. Sisi kimya tu. Plus the speed of depreciation is extremely worrying. A sign of incompetent leadership at all levels. Actually, since oil prices have dropped by more than 50% the demand for USD should drop too. But its the Escrow effect!

Its a fact that USD is appreciating against all major currencies in the word. The US economy is doing very well by now, thats why we cant observe the impact oil prices.This is not only in Tanzania but all over

 

[Fx Trader]

Its a fact that USD is appreciating against all major currencies in the word. The US economy is doing very well by now, thats why we cant observe the impact oil prices.This is not only in Tanzania but all over

My friend no one is complaining about simply depreciation. The issue is the pace of depreciation . There is no justification under normal economic fundamentals for the shilling to depreciate by 12 percent on an annual basis and 6 percent since the start of the year. The main reason as stated earlier is the withholding of donor support.

 

[shaks001]

Hi Friend

Your thoughts on the rapid depreciation of the shilling against the US dollar. All EA currencies have depreciated against the USD dollar sine the beginning of the year. Tanzanian currency is the worse performer

1. Tanzanian Shilling has depreciated by over 6%
2. Kenyan Shilling has depreciated by 1.2%
3. Ugandan Shilling has deprecated by 4%


In addition, Kenyan and Uganda Central Banks have intervened to slow down the deprecation. Why not Tanzania? at an average of 6% per month we will be one of the worse performing currencies in the world! God bless Tanzania!

Mi nadhani hizi ndizo uzi ambazo Mh.Naibu Mwigulu Nchemba anatakiwa unatakiwa uje uzitolee majibu na sio zile za kukanusha kupotea angani na helkopta kwa masaa sita.

Nitashangaa sana kama hoja ile ulijitokeza haraka sana kuitolea ufafanuzi lakini hii ya kuhusu uchumi wa nchi yetu utakaa kimya!

 

[erique]

My friend no one is complaining about simply depreciation. The issue is the pace of depreciation . There is no justification under normal economic fundamentals for the shilling to depreciate by 12 percent on an annual basis and 6 percent since the start of the year. The main reason as stated earlier is the withholding of donor support.

You speak about the speed of depreciation,have you done any analysis on other major currencies, how about Malawi and Zambia? Donor withholding has never been a factor, We have enough reserves and even recently we got ENCB from china 300 USD, so donor fund is not a big deal

 

[sajosojo]

Hapa CCM siwaoni kabisa, sijui Faiza Foxy

 

[Kongwamaji]

Mchumi daraja moja yuko wapi??? CCM ukoo wa makoikoi tu!! Adam malima wapi? Saada mkuya wapi?? Kikwete yuko wapi??? Nec ya CCM iko wapi??? the full organ ya CCM iko wapi??

To do what?

 

[Fx Trader]

I have done my research more than you have. When I compare Tanzania with other EA currencies it is because the structure of the economies are similar. Even during yhe 2011 crises all three central banks acted simultaneously.

Malawi for your information and please go do your research are extremely dependent on donor aid and when the donors suspended aid inflation went of the roof and t bills were at double digit levels. The interbank market had no offers (if you know anything about trading).

Zambia have their own problems; it was the negative sentiment created by the previous president tax policies.

Where is the 300m? If they have enough reserves why dont they use it? Reserves are used in times of crises or mishavior of the exchange rate like in the case of kenya and Uganda.

 

[Kongwamaji]

atleast the Russian Central Bank took some action. Sisi kimya tu. Plus the speed of depreciation is extremely worrying. A sign of incompetent leadership at all levels. Actually, since oil prices have dropped by more than 50% the demand for USD should drop too. But its the Escrow effect!

Escrow effect!! How?

 

[Fx Trader]

Escrow effect!! How?

Well why do you think donors have withheld funds?