Shilling firm as dollar demand diminishes

The shilling maintained its strength against the US dollar on Monday on the back of increased month end inflows and diminishing demand for the greenback. 

The Bank of Tanzania’s (BoT) three repurchase agreement (Repo) auctions in support of the local currency last week also reinforced the shilling.

Standard Chartered Bank said the same trend is expected today, with the shilling anticipated to make some ground against the greenback as corporate meet end month obligations.

“(The) market is expected to be slightly volatile today,” Standard Charted Bank said on its Daily market update. CRDB bank quoted the pair closing at 1605/1615, the same level as Thursday’s.

Another bank said the shilling traded flat against dollar for a better part of last Friday’s trading session with little activities from the market. Barclays Bank said the shilling continued to hold its ground against the greenback last week as the central bank was actively selling the dollar to support the shilling.

“The central bank also held three Repo auctions during the week, continuing in its efforts to support the local currency,” the bank said in its market Report. 

The demand was fairly muted from both customer and interbank counter parties and the pair closed the week barely unchanged at 1614/1619 a dollar.

Barclays said that after a couple of days of a squeeze in the market, liquidity showed signs of improvement at the end of the week with rates coming down. 
According to Trade Economics website, the shilling/dollar spot exchange rate depreciated by 5/- or 0.31 per cent during the last 30 days.

From 2003 until 2013, the shilling value averaged 1319/59, reaching an all time low of 1797/40 in October 2011 and a record high of 1014/30 in December 2004.
Source: Daily News, reported from Dar es Salaam, Tanzania
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