TAU 1
JF-Expert Member
- Jan 8, 2013
- 571
- 376
Soon becoming another zimbabwe and no body in the authority cares,even just to tell Tanzanians whats going on? Inauma sana...Role of reserves
Countries hold reserves for a variety of reasons: to build confidence in the national currency, counter disorderly market conditions, support the conduct of monetary policy, build assets for intergenerational purposes, or influence the exchange rate, the report notes.
Countries may want reserves on hand for precautionary purposesthat is, to provide space to country authorities to respond to potential shocks, prevent chaotic market conditions, and avert economic dislocation. They may also hold them for nonprecautionary purposesfor example, an oil-exporting country may set aside as reserves a portion of its revenue to preserve wealth for future generations.
Assessing the appropriate level of reserves to hold is challengingnot just because of the multiple roles played by reserves, but also because of the complexity of quantifying external risks across countries, the IMF report notes.
oes it mean BoT have insufficent reserves?