Prez asks BOT to defend the value of shilling

Bloomberg

Tanzania’s central bank should rally to the defense of the shilling using means at its disposal, including stopping ‘dollarization’ of the economy, President John Magufuli said.
The currency of the natural gas-producing country has weakened almost 2 percent against the dollar this year, extending depreciation of 19 percent in 2015. Tanzania held US$3.9 billion of gross international reserves at end-March, sufficient for 4.1 months of imports.
“The central bank must defend the value of the shilling,” Magufuli said at an event marking the Bank of Tanzania’s 50th anniversary. “You have many ways you can use, but one is to stop dollarization.”
Neighboring Kenya and Rwanda have secured stand-by facilities from the International Monetary Fund that they can draw down to underpin their economies in times of shock.
Magufuli, in power since November, also asked Tanzania’s central bank to stop supporting under-performing lenders, including state-owned Twiga Bancorp, saying they pose a risk to the economy.
“There are these banks that are violating regulations,” he said. “Don’t hesitate to take action, even those that belong to government.
They wait for government bailouts to survive. If they can’t survive let them die.”
Magufuli urged the Bank of Tanzania to monitor mobile-money transfers closely to ensure the government receives its share of revenue from about 5.5 trillion shillings ($2.5 billion) transacted monthly. The banking regulator should also scrutinize foreign-exchange bureaus more closely to curtail money laundering.
The central bank and Treasury should work together to guarantee the government is receiving its due revenue from mining and telecommunication companies. Tanzania is Africa’s third-largest gold producer and holds 58 trillion cubic feet of natural gas reserves.
“The miners claim to be making losses, but if you are making losses why stay here for 10 years? You leave,” he said.