Tuesday, December 29, 2015

Current account deficit narrows in October

Daily News Reporter
THE current account improved to a deficit of 4,002 million US dollars in the year ended October from 4,972.3 million US dollars recorded in the corresponding period 2014.

The Bank of Tanzania (BoT) monthly economic review shows that the improvement was a result of an increase in the value of export of goods and services, coupled with a decrease in the value of imports of goods.
Exports of goods and services amounted to 9,406.1 million US dollars, an increase of 9.2 per cent over the value recorded in the corresponding year.
Much of the improved performance was observed in the export of manufactured goods and travel receipts mainly receipts from tourism.
Traditional exports increased by 9 percent to 839.2 million US dollars in the year under review with the increase contributed largely driven by improved performance in the export of cashew nuts, coffee, sisal and tobacco.
The improved performance of export of cashew nut was a result of increase in both volume and price, while that of coffee and sisal was driven by price changes.
The export value of tobacco was due to the increase in volume. In the meantime, the gross official foreign reserves amounted to 4,034.2 million US dollars compared with 4,273.2 million US dollars at the end of October 2014.
This was contributed to payment of external government obligations as well as foreign exchange sales in the market by the BoT for liquidity management and reducing of excessive volatility in exchange rate especially owing to a sharp appreciation of the UD dollars that occurred in the second half of 2014/15.
Nonetheless, the reserves remained adequate, sufficient to cover 4 months of projected imports of goods and services, excluding those financed by foreign direct investment. Gross foreign assets of banks amounted to 1,161.0 million US dollars at the end of the period under review, a notable increase from 807.4 million US dollars at the end of October 2014.
The increase was driven, to a large extent, by holding of US dollars in the face of strengthening of the US dollar against most currencies.

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