That’s a neat chart from xe.com. But it raises more questions than anything else.
The sure but steady decline might make sense: if the government is serious about its campaign to boost agriculture (Kilimo Kwanza), then a steady devaluation would make sense, at least for agricultural exports. In that case the recent relatively stable rates reflected in July/August may just indicate that the target exchange rate has been reached.
Or do they reflect a panicked and populist measure to prop up the shilling as the election bears down on us?
But what is really intriguing is the May/June instability? What was going on there? And, well, cui bono?
Exchange rate management seems to be back on the agenda, after Ethiopia’s recent 20 percent devaluation of the Birr. Do TZS trends indicate similar thinking, or is it just something that’s happening to us?