Tanzania shilling nose-dives again

The shilling has tumbled by nearly 200/- to 2,195/- and returned to six-week lows over the week as demand from importers outweighed agro and institutional dollar inflows.

The shilling started to fall last Thursday after demand swelled to close the week at 2,080/- buying and 2,195/- selling levels, sending a diminishing signal of local currency appreciation.

The National Microfinance Bank (NMB) said shilling slightly fell last Friday on a volatile trading session with demand from importers outweighing agro and institutional dollar inflows.

“The shilling trades slightly weak against the dollar as we head for the weekend,” NMB said on e-Market statement over the weekend, quoting the dollar at 2080/2195 levels.

The Interbank Foreign Exchange Market (IFEM) data shows that amount traded increased between June 26 and July 1, ranging from 20 million US dollars and 30 million US dollars.

However, amount traded last Friday was 9.7 million US dollars hence failed to cushion the demand for greenback. CRDB bank said the shilling lost most of the strength it had gained against the dollar at the start of the (last) week during (Thursday) trading session.

“(As the) result of continuing high customer demands for the dollarÉ pushed the local currency to close the session at the levels of 2070/2170 to the dollar”, CRDB said.

Early last week, the shilling made a quick reverse to recover by nearly 200/- to close the market at 2,100/- against US dollars as corporate month end obligation and improved agro inflows.

The shilling, according to market players, also makes the quick gain following improving greenback inflows in the interbank foreign exchange market to retain its trading level in almost four weeks ago.

The shilling depreciated by almost 20 per cent in the first five months of this year, following high demand amid low supply of foreign currency especially the dollar.

While on year-to-year basis ending June 8, 2015, according to BoT, the shilling depreciated by 25 per cent based on the data from Interbank Foreign Exchange Market.

To stabilise the shilling BoT pumped some 410 million US dollars in the first five months of this year.
Source: Daily News, reported from Dar es Salaam, Tanzania
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