Mustafa Mkulo, Tanzania's Minister for Finance and Economic Affairs has expressed hope that the cotton exports would bring stability to shilling, the country's local currency, against the US dollar.
He said that problems in big economies like the European nations and the US, with which the domestic currency is correlated, is one of the key factors that have induced volatility in shilling.
The Minister stated that he is quite certain that if the country manages to export cotton in bulk quantities to markets across the globe, it would help the domestic currency to stabilize.
He added that shilling was performing better than currencies of other East African countries. Elucidating further, he said that the Kenyan shilling and Ugandan shilling have depreciated by 20 and 28 percent respectively over time, but a fall of just seven percent has been noted in Tanzanian shilling.
Tanzanian currency broke all previous records and depreciated to the exchange rate of 1,622 per one US dollar during first part of July, 2011.
The cotton buying season began in the country on June 20 this year and the Tanzania Cotton Board (TCB) estimates the cotton harvest to cross 250,000 tons.
Fibre2fashion News Desk - India
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