Shilling loses 4% in nine weeks


The shilling has lost ground against the US dollar by over 4.0 per cent since the beginning of the year, some nine weeks ago. 

The Bank of Tanzania (BoT) data show that the shilling opened the year at 1,731/82 but closed at 1,807/70 on Wednesday.

On Tuesday, however, the shilling sank to the lowest level of 1,813/71 against a dollar. 

The shilling drop of over 4.0 per cent in just nine weeks of this year is considered as a big plunge compared to 6.05 per cent experienced in the last quarter of 2014.

The central bank, during the last quarter of 2014, reduced slightly the amount sold on Interbank Foreign Exchange Market (IFEM) from 197.4 million US dollars third quarter to 177.2 million US dollars in last quarter.

The National Microfinance Bank (NMB) said the shilling was moderately volatile amidst sporadic greenback inflows and demand.

“The shilling was volatile on Wednesday, strengthening on institutional inflows in the morning then weakening near close of the market on US dollar demand resumption,” NMB said in a daily e-Market report.

The bank added: “additional demand in the market remains a slight risk to the shilling in the near-term,” NMB said. The pro poor bank quoted the shilling at 1,865/- at the close of the market on Wednesday. On daily basis, the shilling made a slight gain on Tuesday but lost the battle on Wednesday to depreciate further.

“The shilling remained relatively stable against the Dollar during Wednesday’s trading session,” CRDB bank said in Market Highlights report.

The bank quoted the shilling opening and closing the markets at the levels of 1,830/1,860. The shilling fall, apart from suffering the appreciation of US dollars globally, is affected by low exports that are surpassed by imports.

By the end of last year’s fourth quarter, the value of imported goods was USD 2.87 billion US dollars, being 3.3 per cent higher than what was recorded in the quarter ending December 2013.

While, on other hand, the value of exports though increased by 2.9 per cent to 1.55 billion US dollars in the last three months of 2014, are almost half of imports.
Source: Daily News, reported by Abduel Elinaza, from Dar es Salaam, Tanzania
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