Kuna wengine walikuwa wanaongelea floating katika mtazamo mwingine,but we need to look from different perspective.Sijui kama akina mkullo wako serious na ku-update modern theories! Nilishawahi kutoa overview on the subject!
If the Governor has paid pivotal attention to the shiling the currency would have taken a very positive appreciation given the current stagnation of US dollars. Tanzania stabilizing, does not in anyway mean that BoT is doing anything exceptional. The Gold since Mkullo's inception to office has appreciated. Is Tanzanian Shilling correlated to the dollars
"No one knows it all. The important thing is that one is objective enough to see obvious errors and admit them. I don't know it all either. Economics is a diverse subject and if solutions were so obvious, all economists would have the same ideas and approach, but of course we know they never do, even in very intellectual societies like America"
Clearly there is a gap between the two of us. Largely enough...demand and supply has nothing to do with currency. Currency is a different economic dimension. Is like a third dimension which Americans and the English mastered a long time ago. Pounds, Dollars, and so on have no inherit value...pounds is also earned and therefore has no inherit bias so is Euro.
In fact the shift from dollar correlation to gold to pure paper is the work of Arthur Burns lifting pages from John Maynard Keynes. Maynard Keynes arguments if followed carefully did not quite avoid Gold as 'junk'. Keynes never quite make the argument that the relationship between gold and money is negligible.
Though some currencies has potential value like junk bonds especially Euro...which is not real currency. Like Chinese and Brazilian currencies which are 'pre-value' and set, which are intended to preserve wage and price and which are not real time currency. They do not float
But legal tender such as pounds and dollars and East African shillings are the world greatest example of free market system. They float freely...they are currency per excellent. Their value and value alone is so kinetic, so dependent on usability that every move that dollars makes, must affect the East African shillings and the pounds. Every move that East African shillings makes must apply to USD.
If the Tanzania Shilling will stabilize it will not gain, it will be 'loosing' in future since the stability means that other factors 'will' affect the currency and positively US D is then negatively on Shilling. The shilling iis at war with dollars, pounds, and so on and it must win them every day,every second, it must gain. The Bank of Tanzania must check on both parameters and establish a radical mechanism to rectify the situation.ndiyo kusema tunahitaji mfumo radical kabisa katika sera za uchumi,sera za mabenki nk.yes we need radical reform.Let us not rely on old fashion theory of floating the foreign currency to curb depreciation.Najua njia hii huwa anipendekeza sana Dr.Honest ngowi wa mzumbe University hata katika Articles zake but ni lazima tuwe makini.
Moving currency to Tanzania via Western Union and company to pick up dollars and pounds in Tanzania, is Shiling capitulation (which is also where you may be coming from supply demand paradigm) and is a losing positive on the Shilling. We don't have to wait for a strong dollars through interest rate spike of the US Feds to understand that there is no hedge on the currency...the Shilling
Shilling is equal to the Euro, equal to the dollars, equal to the cedis and equal to any currency in the world. But their exchange rate - the 3rd dimension of market - make all the difference. The difference (we can compute the differentials) if so stretched is a summary of the deciding economic strategies of these countries.