Gross foreign reserves fall below 4.5 months

The country’s gross official foreign currency reserves are below target by almost 10 per cent, against price stability policy projection of the central bank.

The Bank of Tanzania said the reserves are sufficient to cover 4.1 months as at end of last October, which is slightly below target level of 4.5 months.

BoT said in Monthly Economic Review of last November that the reserves, sufficient to cover 4.1 months, amounted to 4.26 billion US dollars as at end of October 2014.

“[the reserves] are projected to import of goods and services excluding those financed by foreign direct investment,” the central bank said in the report issued this week.

To maintaining price stability, the bank set to maintain foreign currency reserve to cover 4.5 months of projected import of goods and services at all times.

The other tool for maintaining price stability is keeping inflation at single digit. Though the BoT report offered no explanation of dwindling forex reserves, the level rose to 4.63 billion US dollars at the June 2014 compared to 4.35 billion US dollars recorded at June 2013.

But some analysts have it that the level shrunk due to the donors to hold back their budget support for 2014/15 first half as the result of Tegeta Escrow account. Donors have so far contributed about 15 per cent out of total promise of 500 million US dollars.

The saga implicated several government leaders, businessmen and religious leaders as well. The reserves are also dampened by mismatch between imports and exports.

During the year ended last October, total value of exports of goods and services increased by 3.3 per cent to 8.6 billion US dollars compared to the same month 2013.

On other hand in the same period, value of imports of goods and services increased to 13.44 billion US dollars or an increase of 1.3 per cent higher compared to the amount recorded in the year ending October 2013.
Source: Daily News, reported from  Dar es Salaam, Tanzania
Share on Google Plus

About Abduel Elinaza

This is a short description in the author block about the author. You edit it by entering text in the "Biographical Info" field in the user admin panel.