SHILLING STABLE IN FIRST HALF OF 2016 - PROF. NDULU

BoT Governor, Prof. Benno Ndulu.

The shilling has remained steady in the first half of 2016 following monetary policy initiatives taken to manage liquidity in the circulation and economic trend within and outside the country.

The BoT Governor Prof Benno Ndulu said in Dar es Salaam on Wednesday that the increase of goods and services exports as well as decline of imports contributed to the steadiness of the shilling. “The decline on import bill largely due to the fall in oil prices in the world market contributed largely to improving shilling stability,” he said.

He said in the first six months of 2016, the local currency was trading at an average of 2,180 and 2,190 against US dollars. “The stability of the shilling in the free money market implies that stable economic policies and positive trend of foreign exchange ratio are solutions to protecting the value of the shilling against the greenback,” he said.

A country like South Africa with stern control of foreign exchange has seen its local currency facing fluctuation when compared to Tanzania shilling.

He therefore urged that more efforts directed to create conducive investment environment in sectors which may improve foreign exchange ratio like tourism, industries, mining and agriculture.

The freedom of possessing and using foreign currencies was introduced as solution to the situation of dry foreign exchange in the circulation in the 1980’s. Countries which removed such freedom like Zambia suffered foreign currency disappearance.

Thus, it is everyone’s obligations to continue putting conducive environment of production to do away with wishful thinking of controlling money market, he said.

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