Tanzania: New coins in pipeline

Prof Benno Ndulu

The Bank of Tanzania (BoT) is in the final stages of putting new coins into circulation, the governor has said.

Speaking during the 45 minutes program aired by Independent Television (ITV), Prof Benno Ndulu said preparations were in advanced stage for the issue.

However, he did not give details about the denomination of the new coins. Coins currently in circulation are of 200/- 100/- and 50/- denominations.

Meanwhile, Prof Ndulu, said depreciation of the shilling was due to inflation and changes in major world currencies.

He promised that BoT would continue improving the economy and contain inflation.

On interest rates charged by commercial banks, the governor was optimistic that they would go down. At the moment, the average interest charges stand at 13.5 per cent.

According to experts, the high interest charges on loans are a big hindrance to the country’s efforts to recover from setbacks and shocks arising from the global economic crisis.

He said the bank has formed a special unit which will be collecting information on borrowers.

The unit will be used as a source of information to all banks before they provide loans to anyone.

He said before issuing a loan the unit will help banks to get full details of the borrower and whether he had good track in repayment of loans.

Financial experts say slow loan disbursements currently being experienced by many financial institutions was a result of lack of a credit information bureau.

They say one of the challenges facing many financial institutions in Tanzania was lack of reliable borrower information which bankers could act on.

Prof Ndulu also dismissed concerns over the alleged poor quality of the new banknotes, reassuring the public that there was no problem with them. He reiterated that the newly issued banknotes were durable and difficult to forge.

These notes have two features which are very difficult to copy using any technology in this world, he said.

However, he said they are aware that some unscrupulous persons have already started copying the new currency.

But, according to Prof Ndulu, there should be no cause for alarm when the notes leave colour upon being rubbed against another surface, saying this was actually “one of the security features deliberately put on the new banknotes to make them more durable.”

SOURCE: THE GUARDIAN