Mr Paul Maganga, the Domestic Market
Associate Director with the Central Bank told the ‘Daily News’ yesterday
that scarcity of money currently being experienced was part of a tight
monetary policy taken to help in monitoring and control money in the
circulation.
He said the recent government directive
for ministries, local governments and public corporations to transfer
their money to the Central Bank was among the measures which had
contributed to the scarcity of money in the circulation.
About 500bn/- is the sum of money
thought to have been held by the public corporations, ministries and
local governments in commercial banks. The directive on the other hand
has helped the Bank of Tanzania (BoT) to monitor and control money in
circulation, he said.
Instead the public entities should
maintain an operational account at their preferred commercial bank with a
minimum of balance to cater for their monthly operational expenses as
per their monthly cash flow projections.
Mr Maganga said also that the tight
liquidity in the circulation is contributed by most corporate engaged in
paying annual taxes last month, thus cutting spending of funds that
could have been directed to investments. Similarly, the present
situation of dry money in the market is explained by the less government
expenditure for both recurrent and development.
According to CRDB’s Financial Market
Highlights liquidity was tight in the market on Monday as interbank
volume fell by 67 per cent to 18bn/-, while borrowing rates were up by
50 basis points to a weighted average of 14.22 per cent and a high of 16
per cent. Liquidity is expected to remain tight in the market with
borrowing rates holding up at current high levels.
No comments :
Post a Comment