Shilling looses rally grip

The shilling has weakened slightly mainly due to an increasing demand for the US dollar from oil and manufacturing sector at the opening of the week.

It was quoted by National Microfinance Bank (NMB) closing at 1607/1627 to the dollar on Monday against 1,604/1,624 of last Friday. 

NMB said the shilling slightly weakened against the greenback following a good demand of dollar from oil and manufacturing sectors.

Standard Chartered Bank said the depreciated  as demand for the foreign currency found support.

“We anticipate the trend to continue with low to medium market volatility expected today (yesterday),” the bank said. 

However, according to Bank of Tanzania data, the shilling trades in narrow range on Tuesday as market appears unfazed by tight liquidity.

The local unit went down narrowly by 61 cents to 1,612/93 at the close of the yesterday market. Since the beginning of this year the local unity depreciated by 1.6 per cent to 1,612/-.

On other hand the shilling declined by 0.5 per cent to 1,612/- of on Tuesday in comparison with the same day last year. Analysts, have it that it is premature to predict the movement of the shilling in the first month of the year.

NMB said the liquidity remains tight on Monday with overnight borrowing rates closing the day at highs of 13.5 per cent in the interbank money market.
Source: Daily News, reported from Dar es Salaam, Tanzania
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