The shilling has continued to lose
ground against the US dollar, despite this being the end of the month,
when the demand for the local currency is always high.
Money traders expect the local currency
to depreciate further, with little anticipation of appreciation.
Tanzania Securities Chief Executive
Officer, Moremi Marwa, said the major reasons that saw the shilling
losing its traditional battle at end-month is due to strong demand of
greenback from importers.
“We are out of traditional cash crop export and
in the second quarter a mine (Geita Gold Mine) was temporarily closed
for maintenance…this impacted negatively on the supply-side of the
foreign exchange,” Mr Marwa said.
He also said there is increasing demand of fuel for normal vehicle consumption and energy generation, hence pushing the demand side of the US dollar in the forex markets.
He also said there is increasing demand of fuel for normal vehicle consumption and energy generation, hence pushing the demand side of the US dollar in the forex markets.
The closure of Geita Mine, one of the biggest gold mines,
reduces the availability of forex and takes time to put it back on
tracks from mining, extract and exporting.
The mining sector grew by 1.2 per cent in the second quarter compared to 5.6 per cent of last year mainly because of Geita Gold Mine’s temporary closure.
The mining sector grew by 1.2 per cent in the second quarter compared to 5.6 per cent of last year mainly because of Geita Gold Mine’s temporary closure.
Standard
Chartered Bank said that the shilling behaved out of traditional
pattern when the market saw the currency continuing to lose grounds
unlike the previous past.
“We expect the shilling to further depreciate , however, the trend might reverse this week…where most corporate will demand shillings for salaries and taxes,” the bank said in its Daily Market Report.
“We expect the shilling to further depreciate , however, the trend might reverse this week…where most corporate will demand shillings for salaries and taxes,” the bank said in its Daily Market Report.
Barclays Bank said the greenback chalked
marginal gains against the shilling against money traders expectation
that it would appreciate.
“The dollar continues to appreciate, contrary to the expectation of market players that the shilling will appreciate towards month end due to regulatory payments,” Barclays said on its e-newsletter.
Nevertheless, the shilling has continued to trade at between 1,550/- and 1,590/- a US dollar since January, this year, a range that experts say has helped to stabilize prices of imported goods and services in the economy.
“The dollar continues to appreciate, contrary to the expectation of market players that the shilling will appreciate towards month end due to regulatory payments,” Barclays said on its e-newsletter.
Nevertheless, the shilling has continued to trade at between 1,550/- and 1,590/- a US dollar since January, this year, a range that experts say has helped to stabilize prices of imported goods and services in the economy.
Source: The Daily News,http://www.dailynews.co.tz, reported by Abduel Elinaza in Dar es Salaam
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