National Microfinance Bank (NMB) says in its e-Market report that the shilling close on the strong foot against US dollar, the major trading currency, buoyed by end-month local money demand.
“The local currency closed the 2014 yearly trading session on a stronger footing against the dollar buoyed by month end flows and shilling obligations,” NMB says.
The shilling, according to BoT, closes the year at 1731.82. However, NMB says, the shilling has lost ground by almost 8.0 per cent against the greenback since January where the pair traded sub 1,600/- levels.
Standard Chartered Bank says on daily market report that the pair --shilling/dollar -- is expected to trade with minimum price volatility.
“As we go into the New Year 2015, the shilling struggles are expected to persist for the next few weeks or even months until dollar inflows improve in the market,” the bank says.
But overall, StanChart says, the shilling closed the year on the weaker side as local currency battering continued throughout December.
BoT says the performance of the shilling against major international currencies in 2014 was caused by the impact of the US dollar on the global economy.
The BoT’s Director of Economic Policy and Research, Dr Joseph Masawe, says the strength of the dollar against other currencies has made the shilling to be seen struggling.
NMB says the US dollar was set to end 2014 with a gain of more than 12 per cent against a basket of major currencies on Wednesday, its strongest year in almost a decade and, according to most major banks, just a prelude to a further rise this year.
Last year, though, the dollar should see its largest gain since it climbed nearly 13 per cent in 2005, and only the third year in 30 when it has gained more than 10 per cent.
Source: Daily News, reported from Dar es Salaam, Tanzania
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