- Canadian Dollar through the PBZ's online remittance service was 1632 Shillings just few weeks ago, today is worth 1785 Shillings - an abrupt drop of its value!
- How deeper down the drain the Shilling can go?
Below, Ibrahima Ngida - Zanzibar Ni Kwetu's financial guru based in Mysore, Karnataka, India, tries to enlighten us on the demise of our beloved Shilling!
It isn't only in Tanzania that its currency is depreciating, but also to the rest of the world. As US$ is considered to be the Global Accepted currency and rate of interest in US has been increased.
The appreciation in the U.S$ appears to be less about trade and more due to global central bank policy, higher U.S. interest rates and accelerating U.S. economic growth relative to other nations
That means there has been a spike in demand for U.S$ by foreign investors because U.S. interest rates are significantly higher than rates in Europe and Japan.
The $ strengthening trend has been reinforced by speculators, such as hedge funds, which are overwhelmingly positioned for continued appreciation in the $.
There are four primary factors that influence the exchange rate between nations
-Trade
-Investing
-Government policies
-Sentiment.
If our country will take a close look on those 4 items then may be our currency will slightly depreciate and not enormously. It's ok for our currency to depreciate because every other countries' currencies are depreciating due to U.S$. But, it is not okay for our currency to over depreciate.
The appreciation in the U.S$ appears to be less about trade and more due to global central bank policy, higher U.S. interest rates and accelerating U.S. economic growth relative to other nations
That means there has been a spike in demand for U.S$ by foreign investors because U.S. interest rates are significantly higher than rates in Europe and Japan.
The $ strengthening trend has been reinforced by speculators, such as hedge funds, which are overwhelmingly positioned for continued appreciation in the $.
There are four primary factors that influence the exchange rate between nations
-Trade
-Investing
-Government policies
-Sentiment.
If our country will take a close look on those 4 items then may be our currency will slightly depreciate and not enormously. It's ok for our currency to depreciate because every other countries' currencies are depreciating due to U.S$. But, it is not okay for our currency to over depreciate.
Ibrahim Ngida can be reached at znzkwetu@gmail.com
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