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- Aug 2, 2010
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* It was the shame we never had a gold reserves deposits
By In2EastAfrica - Tue May 31, 11:25 pm
Parliaments Public Organisations Accounts Committee chairman Zitto Kabwe speaks during a meeting with senior Bank of Tanzania officials in Dar es Salaam yesterday. With him is committee vice-chairman Deo Filikunjombe. PHOTO | SAID POWA
The Parliamentary Public Organisations Accounts Committee (POAC), has advised the Bank of Tanzania to re-introduce a national gold reserve.
POAC chairman Zitto Kabwe issued the directive in Dar es Salaam yesterday when a BoT official presented the central banks 2009/2010 financial report. According to Mr Kabwe, the re-introduction of the gold reserve at the bank will help the country to boost the value of the local currency during depreciation. He also said the reserve would help the government to get foreign exchange in times of need.
It is very strange that BoT does not keep gold reserves when the country is one of the leading gold exporters in the continent. We are beaten even by Kenya and Malawi which dont export gold yet they have gold reserves, he said.
Mr Kabwe said one of the factors behind the rapid growth in economies of many countries, notably Brazil, India and China, is due to the availability of local gold reserves.
However, the BoT governor, Prof Benno Ndulu, was against the directive, saying re-introduction of gold reserves poses great risks to the bank.
Prof Ndulu said BoT decided to close the gold reserve in 2006 due to volatility of the gold prices in the world market.
For instance, Prof Ndulu said at the time, bought an ounce of gold at $600, but when they decided to sell the precious metal, the price had plummeted to $200 an ounce.
However, Prof Ndulu remarks drew stiff opposition from the legislators, who noted that that was not the case anymore.Most of the legislators queried why BoT was reluctant to reintroduce the gold reserve on the grounds that it poses a high risk while the country maintains a foreign gold reserve which poses the same type of risks.
Everything comes with its own challenges and risks even foreign currencies fluctuate other countries have benefited well from having gold reserves and I dont see why BoT was reluctant to reintroduce the reserve, said Mr Kangi Lugala (Mwibara CCM).
Reported by Frank Kimboy and Florence Mugarula, The Citizen
By In2EastAfrica - Tue May 31, 11:25 pm
Parliaments Public Organisations Accounts Committee chairman Zitto Kabwe speaks during a meeting with senior Bank of Tanzania officials in Dar es Salaam yesterday. With him is committee vice-chairman Deo Filikunjombe. PHOTO | SAID POWA
The Parliamentary Public Organisations Accounts Committee (POAC), has advised the Bank of Tanzania to re-introduce a national gold reserve.
POAC chairman Zitto Kabwe issued the directive in Dar es Salaam yesterday when a BoT official presented the central banks 2009/2010 financial report. According to Mr Kabwe, the re-introduction of the gold reserve at the bank will help the country to boost the value of the local currency during depreciation. He also said the reserve would help the government to get foreign exchange in times of need.
It is very strange that BoT does not keep gold reserves when the country is one of the leading gold exporters in the continent. We are beaten even by Kenya and Malawi which dont export gold yet they have gold reserves, he said.
Mr Kabwe said one of the factors behind the rapid growth in economies of many countries, notably Brazil, India and China, is due to the availability of local gold reserves.
However, the BoT governor, Prof Benno Ndulu, was against the directive, saying re-introduction of gold reserves poses great risks to the bank.
Prof Ndulu said BoT decided to close the gold reserve in 2006 due to volatility of the gold prices in the world market.
For instance, Prof Ndulu said at the time, bought an ounce of gold at $600, but when they decided to sell the precious metal, the price had plummeted to $200 an ounce.
However, Prof Ndulu remarks drew stiff opposition from the legislators, who noted that that was not the case anymore.Most of the legislators queried why BoT was reluctant to reintroduce the gold reserve on the grounds that it poses a high risk while the country maintains a foreign gold reserve which poses the same type of risks.
Everything comes with its own challenges and risks even foreign currencies fluctuate other countries have benefited well from having gold reserves and I dont see why BoT was reluctant to reintroduce the reserve, said Mr Kangi Lugala (Mwibara CCM).
Reported by Frank Kimboy and Florence Mugarula, The Citizen