Shilling rebounds back

The shilling lost significant ground against the U.S. dollar on Tuesday to close the market at 1,610/- but made a quick recovery yesterday thanks to Bank of Tanzania support.

The shilling, however, bounced back on its comfortable range around 1,500/- a dollar yesterday, a level which it maintained since the beginning of this year after the BoT smoothing the market.

National Microfinance Bank’s Treasury Director Aziz Chacha told the ‘Daily News ‘that the shilling made a quick recovery to regain losses that it incurred on Tuesday.

”It was a normal market panic which pushes the exchange rate up, (but) the shilling as long gone to its range bound rate,” Mr Chacha said.

NMB said in its e-market report in Tuesday that the trading session saw the shilling losing strength against the US dollar on the back of demand for the hard currency from importers with relatively low supply for the same.

Traders were on opinion that the shilling might not maintained its current status as corporate clients were on year-ender season holiday and once are back the situation might change.

“Depending on whether or not the Central Bank will be in the interbank selling dollars today (Wednesday), the market might move in either direction,” Standard Chartered bank said yesterday on its Daily market report.

Last October, according to BoT latest Monthly Economic Research of last November, the bank sold a total of 104 million US dollar compared to 93.6 million US dollar sold in the preceding month.

“This resulted to a mop up of 188.1bn/- from the economy,” BoT said in the report issued yesterday. In October, the Bank accounted for 71.9 percent of the total sales in the Inter Foreign Exchange Market.  

Meanwhile, value of export of goods and services was 6,733.8 million US dollar compared to 5,532.0 million US dollar recorded in the year ending October 2010.

This development was largely on account of increase in the price of gold in the world market; export unit prices and volume of cloves and tobacco; tourist arrivals; and exports of various commodities including cement, textile apparels, edible oil, plastic items, iron and steel products, wheat flour, and paper and paper products to the neighbouring countries.
Source The Daily News--By Abduel Elinaza
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