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| BoT HQ in D'Salaam |
Overnight rates have continued to receive intense pressure
as tight liquidity measures hit further to climb to 30 per cent at the end of
the week.
The inter-market saw the lowest overnight offer rate at 27
per cent from the previous 22 reported a day before.
The Weighted Average Rate closed at 27.26 per cent,
representing an increase from 24.92 per cent of the previous market.
Standard Chartered Bank said in a Daily Market statement
that liquidity remains a main challenge for interbank as market continues to be
under intense pressure to get funding.
The bank statement added: “The shilling liquidity tightness
continued.”
In a turn of events which worsened the situation, the
National Microfinance Bank (NMB) pulled all money extended to interbank players
to settle some obligations.
“This caused much pressure on some players since NMB was the
key liquidity provider and their absence is expected to see market rates
spiking further”, the report further reads.
NMB was the largest bank in term of profitability in 2011
posting a pre-tax profit of 103bn/-.
Meanwhile, the tight liquidity measures have helped the
shilling to appreciate as market analysts favour the local currency to gain
against the dollar.
The slowdown in demand for the greenback is also projected
to lift the shilling.
Traders said the shilling will likely trade in the
1,570-1,580 range in the days ahead.
On Thursday commercial banks quoted the shilling at
1,580/1,587 against the dollar, from 1,578/1,583 a week ago.
“The shilling liquidity tightness continued on Thursday,
thus enabling the local currency to retain its strong position from the
previous week gains. Currently, a bit of flat trading is expected with low
level of volatility,” Standard Chartered Bank said in the report.
Source: The Daily News,www.dailynews.co.tz, reported by Abduel Elinaza
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