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This study identifies and analyze the impact of currency fluctuation on import/export
oriented business in Tanzania. The analysis has been done on valuable using both
qualitative and quantitative method based on survey done on sample of selected
companies. Currency fluctuation involves the appreciation or depreciation of
domestic currency against the foreign currency in a certain period and business
environment. Methodology used in investigating the impact of currency fluctuation
on import/export oriented businesses in Tanzania specifically in Dar es Salaam
region, include questionnaire, interview, focus group discussion and observation.
The main objective of this study has entered on tracing the trend and its impact on
performance of import/export oriented businesses in Tanzania. Apart from that also
assessing the existing currency risk management practices in Tanzania business. This
study also analyzing the perception of selected stakeholders regarding the currency
fluctuation impact in Tanzania specifically Dar es Salaam regional.
Clearly in this study I found exchange rate fluctuation has important effect to the
economy of Tanzania in term of domestic price discrimination, competitiveness of
export and import substitution and asset valuation. Selected companies which deals
with import/export business such as Sunda Investment Ltd,Medical Stores
Department,Suma JKT,Tanzania Investment Bank Ltd, Tanzania Electric Supply
Company Ltd,Akiba Commercial Bank ltd managed to reduce huge loss to almost
favorable condition for slight depreciation of domestic currency(TZS) against foreign
currency such as USD simply because entered into foreign forward contract with
their foreign suppliers. For Medium Local Companies such as Akiba commercial
Bank Ltd currency fluctuation still a challenge as they are not well investing in
managing the risk associated their currency fluctuation due to their capital status and
their normal business strategies of local expansion first when compared to Giant
Companies as Tanzania Investment Bank, Suma JKT and Sunda Investmnet (T) Ltd. |
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