Tanzamia: Some count losses as shilling make quick U-turn

Some people are counting heavy losses after the shilling made a quick gain since last Friday that saw the local currency appreciated by nearly 400/- in a single month.

The losers are some importers who a week ago purchased the US dollar at 2410/- but the exchange rate suddenly changed to 2000/- on Tuesday. Other victims are some retail importers.

A financial analyst told the Daily News that for a car importer for instance who paid 2,500 US dollars for one used vehicle last week when the exchange rate was almost 2,400/- per dollar, wired an equivalent of 6m/-. The same vehicle on Tuesday morning cost 5m/- when the shilling gained.

A media consultant, who preferred anonymity, said the shilling quick gain made her to suffer a 3.0m/- loss in the last 48 hours, as she was buying dollars in anticipation of making profit when the shilling slides further.

“The plummeting of shilling cost me dearly, it’s a huge loss, I was shocked,” she said. Another trader said he anticipated to earn 32m/- after selling his merchants quoted in US dollars, but obtained about 29m/- after the shilling gained. 

“I register a loss of 3m/- from Friday (last week) to Monday,” he said.

Overall, according to National Microfinance Bank (NMB), the local currency has gained at least 400/- last month coming down from the highs of 2380/2410 levels a week ago.

“The outlook for the shillings remains promising as agro dollar flows improves,” NMB said in e-Market report. The bank said the shilling slightly corrected the gains on Tuesday’s trading session as importers took advantage of the quarter end flows and tight liquidity stance.

Bank of Tanzania data shows that the shilling started to appreciate on June 26 after it pumped 22.4million US dollars at Interbank Foreign Exchange Market at the time when the rate was 2,168/04 a dollar.

On June 29, BoT again pumped 27.1million US dollars the market volatility was cooled to 2,002/82 a dollar. The amount was the biggest to be pumped at IFEM since last March when some 37million US dollar was sold.

Almost similar amount was pumped to the IFEM on Tuesday and Wednesday to stabilise the shilling to 1,984/13 a dollar in the last two days.

Source: Daily News, reported from Dar es Salaam, Tanzania

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