The shilling is expected to gain against the
dollar, lifted by a local currency liquidity squeeze and a
slowdown in demand for the greenback.
Commercial banks quoted the shilling at 1,580/1,587 to the
dollar on Thursday, from 1,578/1,583 a week ago.
"Next week, we anticipate that the shilling will continue to
appreciate by 2 or 3 shillings," said Sameer Remtulla, a trader
at Commercial Bank of Africa Tanzania.
"The reason for the
appreciation is that the shilling is very tight and players have
been offloading dollars to get the local currency.
"There is a little bit of demand for dollars from oil
companies, but most people are struggling for shillings at the
moment."
Traders said the local currency will likely trade in the
1,570-1,580 range in the days ahead.
"I think the shilling might continue to strengthen because
we are heading towards the end of the month and some customers
will be aggressively selling dollars to get shillings," said
Barton Hamisi, a trader at National Bank of Commerce, a unit of
South Africa's ABSA.
"There is not much activity in the market and we don't see
any fundamentals to significantly move the market. The central
bank is very keen to see the shilling trading at current
levels."
The Bank of Tanzania said on its website it traded US$29.8
million on the interbank forex market in the last week.
Source: Reuters, http://af.reuters.com
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