Question
The Tanzania reporter needs Zambian kwacha to pay a Zambian exporter for the goods purchased from him. The amount to be paid is kwacha 1,000
The Tanzania reporter needs Zambian kwacha to pay a Zambian exporter for the goods purchased from him. The amount to be paid is kwacha 1,000 million, Tanzanian shillings are not quoted against Zambian kwacha, but both currencies are quoted against US dollar. The trader contracted for spot rate basis. At the time the quotes against dollar were Tsh900/US$ and the kwacha 100/US$.
Required:
1. What will be the exchange rate between Tanzania shillings and Zambian kwacha?
2. How much Tanzanian shillings should be given to get 1,000 million kwacha to effect payment to Zambian exporter?
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