Tanzania's shilling drops to historic lows

Image result for shilling tanzaniaThe shilling has depreciated to historical lows after it plunged to below 1,800/- mark against US dollar yesterday and traders predicts a further slide in the future.

The Bank of Tanzania (BoT) says in its latest monetary policy report that the shilling generally depreciated mainly due to the “strengthening of the US dollar against all major currencies”.

BoT data show that the local currency tumbled to 1,800/58 yesterday being the lowest figure since the introduction of Tanzania’s shilling in 1966.

The CRDB bank quoted the shilling exchange against the greenback at the levels of 1835/1860 by the end of last week’s trading session.

“We anticipate a continuation of this weakening trend today (yesterday),” the banks said in its Market Highlights. Another bank, National Microfinance Bank (NMB) said the shilling tumble was the result of further on dollar demand in interbank foreign exchange market.

“The shilling closed a week on a weaker footing as it continued to fall on (last) Friday with strong greenback demand in the interbank foreign exchange market,” NMB said NMB quoted the shilling closing the week at 1,790/1,880 a dollar.

However, Tanzania Securities, a stock brokerage firm, was optimistic that the shilling would appreciate as traders are settling end-month obligations despite losing some grounds last week.

“We might see improvement on shilling against US dollar as traders will need the local currency to settle some month end statutory obligations,” TSL Operations Officer, Ms Lina Maswi said in a weekly report.

According to NMB, the dollar index slipped on last Friday, pegged back by month-end selling, but was still on track for its eighth straight month of gains on better data and comments from Federal Reserve officials that bolstered bets for a rate rise this year.

The index, which measures the dollar’s performance against major currencies, was set to mark its longest streak of monthly gains since the greenback was floated as a fiat currency in 1971.

While shilling lose grounds, South Africa’s rand steadied against the dollar early on last Friday as traders awaited the release of trade data later in the day for clues on the status of the economy.

The rand was at 11.5350 to the dollar compared with its Thursday closing level of 11.5400. Sterling also steadied on last Friday after a roller coaster week which has seen it scale seven year highs against the euro even as doubts appear over how much more it can gain ahead of a potentially unsettling election in May

. The sterling helped by an afternoon recovery in Europe for the euro against the dollar, the pound bounced back from lows below 1.54 US dollars hit in early trade. It also inched up 0.12 per cent to 72.54 pence per euro, its strongest since the end of 2007.
Source: Daily News, reported from Dar es Salaam, Tanzania
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