Many countries have a very similar set up of central banks responsibilities such as Financial Market...

Many countries have a very similar set up of central banks responsibilities such as Financial Market Stability, Monetary Policy and issuing currency. The central authority of the Tanzania money and banking system is the Board of Directors of the Bank of Tanzania.

Required:

Critically describe the purpose and membership of the Board of Directors of the Bank of Tanzania.

Expert Solution

The purpose:

The Board of Directors (the "BOD") have to led the efforts to direct the Bank of Tanzania (the "Bank") achieve the goals it has been tasked for. The BOD has to ensure that the Bank fulfills its primary objective of leading the country towards a stable and prospering economy.

The Bank had been tasked with multiple responsibilities since the time of its inception:

Issuance and maintenance of circulation of the national currency, the Tanzanian shilling.
To formulate and implement the monetary policy
To make decisions about interest rate changes
Price and exchange rate stability in the long run
Control the usage of foreign exchange to protect national interests
Prevent the local currency, the Tanzanian shilling, from devaluation

The BOD has the administrative and functional control of the Bank and is tasked with the responsibility of steering the bank to achieve its stated objectives.

Membership:

A 10 member board comprising of:
- The Governor,
- 3 deputy governors
- 4 non-executive directors,
- The principal secretary to the treasury of the Revolutionary Government of Zanzibar
- The representative of the Ministry of Finance of the Government of the United Republic, and the secretary to the board.
Headed by the Governor
Assisted by the deputy governors towards administration, economic and financial policies and financial stability

jeff jeffy answered 9 months ago

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