Tanzania's current account gap narrows 15.8 pct in year to March

DAR ES SALAAM (Reuters) - Tanzania's current account deficit narrowed 15.8 percent in the year to March, buoyed by lower oil prices and improved performance of tourism and manufacturing sectors, its central bank said on Thursday. The deficit narrowed to $4.295 billion in the 12 months to March from $5.102 billion in the same period in 2014, the Bank of Tanzania said in its latest monthly economic report. However, capital and financial account balances deteriorated, leading to the worsening of the overall balance of payments to a deficit of $460.2 million versus a surplus of $192.2 million in the year to March 2014, the central bank said. Earnings from tourism, the main foreign exchange source, rose by 9.91 percent to $2.118 billion due to more visitor arrivals. Imports of goods and services fell to $13.456 billion from $13.765 billion previously. Oil imports fell to $3.295 billion from $4.226 billion, the bank said. Earnings from gold, the other main source of foreign income, fell to $1.377 billion from $1.588 billion a year ago, reflecting lower export volumes and global prices. The bank said its total foreign exchange reserves fell to $4.06 billion, or about four months of import cover, from $4.226 billion a year ago. "The decline was on account of payment of government external obligations and selling of foreign exchange in the inter-bank foreign exchange market for liquidity management and smoothening out of short-term fluctuations in the exchange rate," the central bank said. The shilling has been setting new record lows against the U.S dollar over the past few months due to a surge in dollar buying amid scanty hard currency inflows.