Currency crises: Are we heading the Russian way?

[Mabulangati]

Kwani hufahamu Tanzania wanatumia pesa za aina mbili? Yaani US dollars na shilingi? Waifute tu hii shilingi wafanye kama Zimbabwe maana wanaoumia ni walala hoi. Lets change to US DOLLARS AND DITCH THIS USELESS SHILLING SI ALICHEMA NI ZA MADAFU HADHARANI.

Sioni Tatizo kuiita madafu, hata US ukiwa kule dola ina majina lukuki. Acha ushamba unajua inakuweje hadi ifike mahali ukubali kutumia sarafu ya wengine? Kama hatujui tupige kimya.

 

[Precise Pangolin]

hivi yule professor anafanya nini pale BOT?

Yupo busy kupitisha hela za escrow

 

[Precise Pangolin]

Although I am a scientist but your point does not add up. About 40% of our budget depends on the donors. I fail to understand how this will not affect us? Probably you should explain how Mwigulu will cover up the gap. If it's true that we can do it without them this time around then we don't need them at all.

Mwigulu is busy with chopa and renaming himself as Sokoine

 

[reandle]

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

Flooding of the forex in the market had never been a best option in the forex world since it's just a short term solution, sometimes a week or less unless if you're prepared to flood the market every time the dollar hits the peak... this's stupid depreciation control and I can call it a political and not economical or financial, whoever! Kind of control that aims at calming people down, mostly consumers who count the largest block of the voters! It's rather to let the market regulate the system than flooding the market with the saved dollars.

Zungu Pule's post #2 says all about currency depreciation... this's not always a bad thing provided it doesn't depreciate beyond a certain limit... for me, even if it it hits at Tsh. 1900 as a retail selling price with Tsh. 1800+ as a buying price, still it won't be bad. It's an opportunity, grab it!

I don't remember properly but if am not mistaken this's low season in terms of tourists! Anyone working in the hospitality industry, please clear my doubt... is this low or high season? Matola, I hope you haven't forgotten yet! If it's low season, then it's normal coz' the only reliable source of forex becomes those sold by BOT while in high season lot of dollars circulates in the economy from tourism activities. The banks may have enough forex just bought directly from tourists rather than waiting those issued by BOT! That's one but second, the oil price in the world market is low! If we've oil consumers who purchase oil in bulk for their own use, such as mining investors, this can lead to depreciation as well because they may opt to purchase more than usual so as they can take an opportunity of low oil price level in the world market! Doing that, will demand more forex and if the only reliable supplier is BOT then there's no doubt the dollar will go on hitting the ceiling.

It's the new year, right? Some of the businessmen tend to shift from one product to another or addition of certain product/s in their stocks that's why is very common along this season to see there're lot of sales which practically aim at cleaning their stores so as they can bring in new inventories... and if so, it can lead to depreciation as well especially if the only reliable supplier of forex in the market is the BOT.

 

[erique]

My friend I think u need to go back to basics. You just dont compare BoP that is only stat. If the countries are similar than why dont tanzania instead go and form the monetary union with zambia and malawi? They reason they have set a target of 2024 is because they need to align their macro economic targets first.

If Tz economy is not similar to kenya and uganda than why did tz only liberalise its capital account to EA? Are u aware you even aware of that? Why not Zambia and Uganda? Get your facts right buddy.

Fyi, tz is also phasing out its reserve money policy t

If BoT has enough reserves than why dont they intervene? You said they are watching. But watching and doing what?

If you think some banks are creating artifical demand than why dont BoT punish them? Or that is not part lf their mandate?

Now i get to understanda that there is no way i can make you understand, you real need to learn alot. There is no way you can talk abouy exchange rate in any country without talking about its BOP, this is too common to discuss it here with you.

And thats why i said the EA countries are not similar, but we want to make them similar before going for Monetary Union. Kenya and Tanzania are not the same, if this wont get into your mind then i cant help you for now. And on the way to make the EA similar we open our CA, to EA states. But later we will open to the whole word.

It seems you cant differentiate between reserve money poliy and foreghn reserves. Go and do the homework, these are two different things, here we talk about foreign reserves and not reserve money policy, and am saying the BOT has enough foreign reserves, and it will entervene when its right, not because Kenya has enterviened. And when the BOT entervene you will burn your fingures, because this game banks plays will not take them far.

If you are good in macros, you wouldnt even start this arguement here, because if you think this exchange rate is real, fundamentaly one would expect to also see high inflation. I mentioned earlier we are now at 4.8%, which doesnot go inline with the current exchange rate. Therefore this is fake, and its Its an artficial demand.

And by the way, i have read somewhere,reserve money policy is about using monetary aggregates to implement monetary policy, the BoT is not phasing out its its current policy, but it is looking the possibility to move to inflationary targeting just like most of other countries in the word.

Please do enough research before you come here kuwatisha wananchi.

 

[1701]

Dah,mbona anayesema tanzania tuna incmptnt scholars yeye mwenyewe hajielew?rudi hapa na data za tanzania,kenya na ug kwenye expo performance na inflation then utoe justfctn ya bot kuinglia market forces,expo ya tz imepanda kwa 6% na inatarajiwa kupanga zaidi na inflation imeshuka pia,kwa hz sababu currency ita_stabilize miez michache ijayo,any intervtn itakuwa na long term effect,rudia data za impo/expo za ken na ug,pia check inflatn tang mwaka jana utaona wana sababu ya msing kuinglia

 

[The Khoisan]

Dont copy old statistics, go check again, its no longer 40%

It does not matter ............... even if it's 25 %, it's still huge and the matter of the facts is we still depend on the donors!!

 

[BadoMbali]

I dont know how long we are going to let these good for nothing junks mess with our lives

 

[The Khoisan]

Mwigulu is busy with chopa and renaming himself as Sokoine

If Mwigulu Nchemba cannot even contribute in this type of discussions .................. what makes him think he's a Presidential material!!?? I now agree, Tanzanians like taking chances, at least locally!!

 

[Mfamaji]

Mtu mwenye akili zake kweli anaweza kujiita marehemu Nyerere, marehemu Sokoine, marehemu Mandela?

 

[Fx Trader]

I totally agree with my friends above. We need a statement from the Bank of Tanzania or the Ministry of Finance immediately.

 

[Maundumula]

Kuwa na uwezo wa ku intervene lazima muwe na foreign reserves za kutosha.

Mnaweza kumlaumu Ndulu wa watu bure kumbe tatizo sisi wenyewe.

Kwenye nchi ambayo hata Toothpick inatoka China, Korosho inatoka uarabuni hivi mnategemea BOT iwe na muscles kweli za kupambana na giant USD?

 

[Fx Trader]

According to BoT, their reserves can cover four months of imports.

 

[sblandes]

Bei ya leo imefikia TzS. 1,825/- kwa dollar !!!

Bado shillingi yetu itazidi kushuka zaidi.Hadi hapo tutaweka siasa za unafiki pembeni na kuchagua kulimia majembe orignal katika safu za uongozi wa nchi hii.

 

[Fx Trader]

Very Sad that the Deputy Ministry of Finance is campaigning while the currency is in free fall. Don't deserve to be our President.

 

[MchunguZI]

my friend, the assumption of the shilling being overvalued was based on the current account deficit which is expected to shrink due to lower oil prices and the relative inflation rate.

In times of a mismatch between inflows and outflows, the Central Bank should come into stabilize the market as the case in Uganda and Kenya.

The concern is the speed of depreciation which deviates the price levels from fundamentals. I also doubt if those reserves do actually exists in reality.

That is a clear and true fact! Tanzania is a ravaged country my friend. You know what? Our Dollar reserve hardly can survive any season above three-month-length! this is the situation now, that we have been starved (no donation) for more than three months and now it is a free falling phenomenon. No buoyancy at all!

It is almost a charcoal maker economy. Cash in hand to stomach then cash in hand again.

 

[MchunguZI]

Very Sad that the Deputy Ministry of Finance is campaigning while the currency is in free fall. Don't deserve to be our President.

Mmhhhhh! You know this guy together with his boss, Minister, has been schooling for higher qualification, meanwhile attending full-time official duties. I can guess that one of the two has been fulfilled partially or each of the two has been executed in a 50:50 ratio manner, meaning that he has mastered nothing!

btw. why don't we here any statement from one of these two bosses? The minister is mum, the deputy similarly mum. No one between them can use economic language to satisfy our hungry brain. I have said before, that it is dangerous to have on job training personnel at the treasury, Central Bank, TRA and important at the statehouse.

 

[Money Stunna]

Nashangaa mnacholalamika wakati mkuu alishasema pesa yenu ni ya madafu

 

[Wacha1]

Sioni Tatizo kuiita madafu, hata US ukiwa kule dola ina majina lukuki. Acha ushamba unajua inakuweje hadi ifike mahali ukubali kutumia sarafu ya wengine? Kama hatujui tupige kimya.

Inaonyesha wewe ni mwerevu sasa aliyehalalisha US dollars kutumika Tanzania sambamba ni nani kama sio hao makuwadi wako?

 

[salmar]

1835=1 dolare