Exchange rate changes in Tanzania impact inflation, requiring vigilance from authorities.
The study looked at how changes in exchange rates affect prices in Tanzania. They used a type of model to analyze data from 1990 to 2005. The results showed that even though the currency lost value in the late 1990s, the impact on prices went down. This could be because of changes made to the economy during that time. However, the study suggests that as more goods are imported, the effect of exchange rates on prices could go up in the future. This means that the government needs to keep an eye on how foreign prices might affect inflation in Tanzania. To do this, they should aim to keep inflation low and steady, and keep making changes to make the economy more efficient and competitive.