Tanzania's current account deficit narrows further

The current account balance deficit has narrowed by almost 16 per cent in March thanks to exports increase.

The Bank of Tanzania (BoT) said in its latest monthly economic review that the current account balance narrowed to a deficit of 4.29 billion US dollar for the year ending March, compared to 5.10 billion US dollars in a corresponding period last year.

BoT said the improvement was mainly “on account of increase in exports of goods and services coupled with a decrease in imports of both goods and services.”

On other hand, capital and financial account balances deteriorated, leading to worsening of the overall balance of payments to a deficit of 460.2 million US dollars compared to a surplus of 192.2 million US dollars recorded in 2014.

The deficit depleted gross official foreign reserves to 4.06 billion US dollars at the end of March from 4.22 billion US dollars recorded at the end of the preceding month.

The decline, according to the central bank April’s Month Economic Review, was on account of payment of government external obligations. Also the decline was registered following selling of foreign exchange in the interbank foreign exchange market for liquidity management and smoothing out of short-term fluctuations in the exchange rate.

“The foreign reserves were sufficient to cover about 4.0 months of projected imports of goods and services excluding those financed by foreign direct investment,” BoT said.

The government external debt stock amounted to 14.69 billion US dollars at the end of March, a decrease of 61.3 million US dollars from the stock recorded at the end of February. “The decrease was on account of exchange rates fluctuations,” BoT said.

On annual basis, the debt stock increased by 1.23 billion US dollars from the amount recorded in the corresponding period in 2014 on account of new disbursements.

The external debt profile by borrower category indicated that in March, central government external debt decreased by 64.7 million US dollars due to appreciation of greenback against Special Drawing Rights (SDR) while, on year to year basis, it increased by 1.07 billion US dollars.

Value of export of goods and services amounted to 9.35 billion US dollars in the year ending March, compared with 8.59 billion US dollars recorded in the corresponding period in 2014.

While value of imports of goods and services went down to 13.45 billion US dollars in the year ending March compared with 13.76 billion US dollars recorded in the corresponding period in 2014.
Source: Daily News, reported from Dar es Salaam, Tanzania
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