Shilling remains firm as dollars flow

The shilling has maintained its recent strength against the US dollar, thanks to month end inflows of the greenback. The commercial banks quoted the shilling at 1606/1616, which was higher by 2/- than Monday’s close of 1608/1618.

Standard Chartered said the shilling was expected to maintain its gains as the dollar inflows continued in the market. “Low price volatility is anticipated in the market today,” the bank said in its daily market commentary.

CRDB also said the local unit gained further against the hard currencies during Tuesday’s trading session amid falling month end obligations. Bank of Tanzania data show that the shilling has depreciated by 34/61 from 1,579/98 to 1,614/59 in the last nine months.

BoT Monthly Economic Review of August shows that in July this year the bank intervened the Interbank Foreign Exchange Market (IFEM), selling 59 per cent of total dollars.

Despite the intervention that sought to quell depreciation, the shilling weakened to 1,617/79 per dollar from 1,609/29 in the preceding month but further down from 1,583/79 recorded in similar period in 2012.

“The Bank sold 59 per cent of the total market turnover to complement other monetary policy instruments,” BoT said in its report. During the period under review, total transactions in IFEM amounted to 170 million US dollars compared to 153 million US dollars transacted in the preceding month.

The shilling gain, according to financial analysts, will be defeated in the short-term as the country’s imports exceed exports.

The value of exports of goods and services was 8,269.6 million US dollars during the year ending July this year while total imports stood at 10,486 million US dollars.
Source: Daily News, reported from Dar es Salaam, Tanzania
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