Overview of the changes in Tanzania's money supply components, revealing trends and fluctuations in both domestic and foreign financial assets over the specified period.

This research provided pertains to the Money Supply in Tanzania for October 2023, with comparisons to the previous month (September 2023) and changes over the past year. Money supply is classified into various components, providing insights into the financial dynamics of the country.

Net Foreign Assets:

Net foreign assets represent the difference between a country's foreign assets and liabilities. In Tanzania, there was a significant decrease in net foreign assets from -40.7 in September to 14.9 in October, indicating an improvement. The 71% monthly change and the substantial 373% increase over the year suggest a positive trend in the country's international financial position.

Bank of Tanzania:

The Bank of Tanzania's net foreign assets also increased from 2.9 to 4.3, showing a 33% monthly change and an impressive 767% surge over the past year. This signifies a strengthening position for the central bank in terms of its foreign assets.

Net Domestic Assets:

Contrastingly, net domestic assets experienced a decline from 50.4 to 11.7, reflecting a significant 54% decrease over the month and a substantial 331% decrease over the year. This suggests a reduction in the country's domestic financial assets.

Components of Net Domestic Assets:

• Domestic Claims: Domestic claims decreased from 34.2 to 16.3, indicating an 11% decline over the month and a 110% decrease over the year. This reflects a reduction in claims within the country's domestic financial system.
• Securities Held by Banks: Securities held by banks dropped from 21.3 to 16.4, reflecting a 30% decrease over the month and an 18% decrease over the year. This suggests a decrease in the securities held by banks.
• Claims on the Private Sector: Claims on the private sector decreased from 19.5 to 17.9, indicating a 9% decline over the month and a 32% decrease over the year. This implies a reduction in the financial claims on the private sector.

Money Supply (M3), Broad Money Supply (M2), and Narrow Money Supply (M1):

• Extended Broad Money (M3): M3 decreased from 14.5 to 12.4, showing a 17% decline over the month and a 7% decrease over the year. This suggests a contraction in the broadest measure of the money supply.
• Foreign Currency Deposits: Foreign currency deposits dropped from 16.2 to 13, indicating a 25% decrease over the month and an 8% decrease over the year. This reflects a reduction in foreign currency holdings.
• Broad Money Supply (M2): M2 decreased from 14 to 12.2, reflecting a 15% decline over the month and a 7% decrease over the year. This indicates a contraction in the overall money supply within the economy.
• Other Deposits: Other deposits decreased from 15.9 to 14.6, showing a 9% decline over the month and a significant 37% decrease over the year. This implies a reduction in other forms of deposits in the financial system.
• Narrow Money Supply (M1): M1 decreased from 12.8 to 10.7, reflecting a 20% decline over the month but a 13% increase over the year. This suggests a contraction in the narrowest measure of the money supply despite the yearly increase.

Components of Narrow Money Supply:

• Currency in Circulation: Currency in circulation dropped from 10.7 to 10.1, showing a 6% decline over the month and a significant 39% decrease over the year. This indicates a reduction in the amount of currency circulating in the economy.
• Transferable Deposits: Transferable deposits decreased from 13.8 to 11, indicating a 25% decline over the month but a 34% increase over the year. This suggests fluctuations in transferable deposits, with a notable increase over the year despite the monthly decrease.

Tanzania's Money Supply for October 2023 reveals key trends and changes in the country's financial landscape:

Net Foreign Assets Improvement:

• There is a notable improvement in Tanzania's net foreign assets, with a substantial increase from the previous month (September 2023) and a remarkable 373% surge compared to the same period last year. This suggests positive developments in the country's international financial position.

Central Bank Strength:

• The Bank of Tanzania has experienced growth in its net foreign assets, indicating a strengthened position for the central bank in terms of foreign assets. The 767% increase over the year is particularly noteworthy.

Contrasting Domestic Dynamics:

• While foreign assets are improving, there is a significant decline in net domestic assets, reflecting a reduction in the country's domestic financial assets.

Components of Net Domestic Assets:

• Domestic claims, securities held by banks, and claims on the private sector have all decreased, contributing to the overall decline in net domestic assets. These reductions may have implications for the domestic financial system.

Money Supply Contraction:

• The various measures of money supply (M3, M2, M1) have experienced significant contractions over the month, ranging from 15% to 20%. This suggests a reduction in the overall amount of money circulating in the economy.

Foreign Currency Holdings Decline:

• Foreign currency deposits have decreased by 25% over the month, indicating a reduction in foreign currency holdings. This may have implications for the country's ability to engage in international trade.

Deposits and Claims Reduction:

• Other deposits have decreased by 9%, while claims on the private sector have decreased by 9% and securities held by banks have decreased by 30%. These reductions in financial instruments suggest a broader trend of decreased financial activity or a shift in investment patterns.

Narrow Money Supply Contradiction:

• While the narrowest measure of money supply (M1) has contracted over the month, there is a 13% increase compared to the same period last year. This indicates a complex picture, with short-term contraction but long-term growth in the narrowest money supply.

Currency in Circulation Reduction:

• The amount of currency in circulation has decreased by 6% over the month and a substantial 39% over the year. This reduction may be influenced by shifts in payment methods or changes in consumer behavior.

Fluctuations in Transferable Deposits:

• Transferable deposits show a 25% decrease over the month but a 34% increase over the year, suggesting volatility in this particular component of the money supply.