They argued that generally in 2012
the shilling enjoyed a higher degree of stability, but remained
vulnerable to shifts in investor appetite due to high current account
deficit, which is likely to increase due to higher oil prices.
The Tanzania Securities Chief Executive Officer, Mr Moremi Marwa,
said in a research paper that the shilling may slip from the last year's
average of 1,529/- to 1,626/- this year, before dropping further to
1,670/- of 2014.
"We expect the shilling to slip in 2013," Mr Marwa said
in a research dubbed Equity Research on Local Listed Banks March 2013.
He added: "We believe that persistent double digit inflation together
with an easing of liquidity conditions will impair confidence in the
domestic currency going into 2013, impeding a lasting stabilisation in
the foreign exchange market".
The document, moreover said, the country reliance on foreign aid and
investment inflows will result into further weakness in current account
deficit. "The medium trend for the shilling will be determined by the
maintenance of a positive outlook for the external sector," the document
shows.
Other medium outlooks include the steady return of foreign direct
investment and aid flows to emerging markets, as well as good
performances in the tourism, mining and agricultural sectors.
On the
other hand, the shilling strengthened against the US dollar as the end
of the quarter approaches on the back of increased inflows from
non-trading sources and local currency demand.
The shilling was quoted by the commercial banks opening the week
courageously and appreciated to 1,609/1,619 a dollar against 1,610/1,620
of last Friday.
The National Microfinance Bank said the shilling
appreciated on the first day of the week on the tightening of shilling
liquidity in the market raised by the corporate demand for settling
their end-quarter obligations.
"(The) shilling strengthens against US dollar as the quarter end
approaches,) NMB said on its Daily Market report. NMB added: "Further
shilling strengthing is likely as more companies exchange dollars for
local payments this week and as this begins to tighten shilling
liquidity in the market."
The bank also said the shilling strengthened slightly against the
dollar on the back of dollars "inflows from NGOs." While CRDB Bank said
the "local currency continued to appreciate against the greenback-thanks
to the increase in inflows".
Another bank, Standard Chartered said, the shilling made some gains
against the greenback yesterday (Tuesday) on the back of increased
shilling demand for quarter end, corporate tax payment and salary
purposes.
"We anticipate the shilling to continue its gains today
(Wednesday) with medium price volatility," the bank said.
On the other hand, the Bank of Tanzania (BoT) said for the past 14
months the exchange rate of the shilling against dollar remained stable
in comparison with the depreciation for the previous year and in
comparison with many currencies including those of our major trading
partners.
The shilling depreciated by merely 1 per cent in the 12 months
ending last month, the Kenyan shilling sank by 4.6 per cent and the
Ugandan shilling by 11.7 per cent.
Source: The Daily News, www.dailynews.co.tz reported by Abduel Elinaza in Dar es Salaam
0 comments :
Post a Comment