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Tanzania Shilling stabilises on low dollar demand

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Tsh according to reports, closed last Friday session trading at 2,182/2,192 against the US dollar, as the market was well-matched. CRDB Bank said the the shilling held firmly against the dollar due to constant demand and supply of the greenback.

“With a generally constant demand and supply for the dollar, the local currency held firm against the US dollar last week,” the bank said on its market highlights.

Earlier, National Microfinance Bank (NMB) said that shilling was expected to hold its position firmly as demand for local currency was anticipated to rise due to end-quarter corporate obligations.

“The shilling is expected to strengthen in the near;term as corporate sell dollars and purchase the local currency to settle quarter’end obligations,” NMB said in e-market statements.

The shilling, according to central bank, opened the month trading at 2,189/96 but managed to maintain its firmness to close yester-session at 2,190/20, losing merely a friction of cents.

However, the shilling since January has depreciated 1.34 per cent to 2,190/20 of yesterday. BoT’s Domestic Market Associate Director, Mr Paul Maganga, said the shilling was expected to strengthen this year as inflows are expected to improve.

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“We are monitoring the (shilling) trend on daily basis…the trend shows the shilling will stabilize,” Mr Maganga said during financial journalists’ seminar last week in Dodoma. He added the shilling seems to find a new market equilibrium which was good for economic stabilisation.

International Monetary Fund (IMF) said when replying the letter early this year that the shilling depreciation was largely reflected due to the global strength of the dollar. The IMF also said domestic factors contributed to the volatility and such as the loosening of monetary policy in late 2014.

“Staff’s preliminary assessment is that the recent depreciation has brought the real effective exchange rate which was last assessed in 2014 to be somewhat overvalued, closer to equilibrium,” IMF report showed.

source Daily News Report 

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