TANZANIA gross official foreign reserves surged to some 8.41tri/-
(3,894.1 million US dollars) by the end of May sufficient to cover about
4.1 months of projected imports, excluding those financed by foreign
direct investment.
The microeconomic convergence criteria
agreed in the East African Community (EAC) Monetary Union is the foreign
exchange reserve enough to cover 4.5 months of imports.
According to the Bank of Tanzania (BoT)
monthly economic review June 2016, the level also improved from 3.9
months of import recorded in the past few months, to a large extent due
to a fall in the import bill that resulted from relatively low oil
prices in the world market.
During May, this year, the prices of oil
in the world market went down by 22.7 per cent to 561.2 US dollars per
metric tonne compared with 725.6 US dollars per tonne recorded in the
corresponding period in 2015.
The level also improved from 3.9 months
of import recorded in the past few months, to a large extent due to a
fall in the import bill that resulted from relatively low oil prices in
the world market. Meanwhile, foreign gross official reserves amounted to
some 8.30tri/- (3,845 million US dollars) at the end of April 2016.
BoT said recently that the target, as
per 2016/17 budget was to maintain gross official reserves sufficient to
cover at least 4.0 months of projected imports of goods and services by
June 2017. As regards gross foreign assets of banks, there was no
significant change from the preceding month; they stood at around 814.5
million US dollars by end of May 2016.
The external sector registered a notable improvement following an increase in exports and a decline in imports.
As a result, overall balance of payments significantly improved to a surplus of USD 72.1 million in the year ending May 2016 compared with a deficit of 582.2 million US dollars in the corresponding period in 2015
Original link
http://dailynews.co.tz/index.php/business/52501-foreign-exchange-reserve-steadily-improves
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