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TOPIC: Does EAC countries currencies will depreciate forever?

Does EAC countries currencies will depreciate forever? 14 Feb 2017 09:31 #141

  • RDN
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Exchange Rate Digest for January 2017 for EAC Countries (Tanzania, Kenya, Uganda, Rwanda and Burundi) shows that all currencies recorded a persistent depreciation to USD. In comparison to Trading Economics 2017 projections, the exchange rate movement for January 2017 still within the projection horizon. According to Trading Economics, the value of EAC Member state countries will depreciate at average rate of 2% at the end of 2017 (December 2017). It will further depreciate at an average rate of 16% by 2020. Taking into account the trend of exchange rate for EAC member state countries from 1990s, it seems that there is no hope for these currencies to appreciate against USD.

Is it true there is no hope? Does Tanzania, Kenya, Uganda, Rwanda and Burundi currencies will depreciate forever against USD.

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Last Edit: by RDN.

Does EAC countries currencies will depreciate forever? 15 Feb 2017 07:52 #142

Thanks for sharing us a great article on exchange rate in EAC member state countries. It is not true that is no hope unless we have a common currency against USD. If the governments of all member states come into agreement to have a common currency.
Why Common currency?
-Elimination of exchange rate uncertainty; A single currency gets rid of all this uncertainty within the single currency zone, and should encourage trade
-Increased inward investment; There will be a possibility of increased inward investment from the rest of the world into EAC Countries. This will make a currency one of the most significant world currencies.
Therefore, with this aspect of common currency am sure there will be minimal or no more depreciation like how EURO is greater than USD.

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