Tanzania: Shilling seen stable against US dollar

The increased inflows of agricultural export proceeds continued to contribute significantly to the strengthening of the shilling.

Also the increased tourism earnings during this season is playing vital role to the stability of the local currency against the world major currencies.

According to the Ministry of Natural Resources and Tourism which directly employs 500,000 people, accounts for 25 per cent of Tanzania’s total foreign exchange earnings.

The Bank of Tanzania (BoT) figures for May this year shows that earnings from tourism which is the major sources of foreign earnings rose by 10.6 per cent to 2.16 billion US dollars in the year to May 2015, from 1.95 billion US dollars as visitor arrivals increased.

Similarly exports earnings from goods and services increased by 9.8 percent to 9,454.5 million US dollars in the year ending May 2015 from the corresponding period last year. The improvement was driven by an increase in export value of coffee and cashew nut.

Export value of cashew nut improved significantly owing to an increase in export volume and price.

Another government boost received that strengthened the shilling is the 200 million US dollars from China Development Bank, in addition to 100 million US dollars from the World Bank and 77 million US dollars from African Development Bank.

According to the NMB Bank e-market report the shilling strengthened further on the back of strengthening dollar inflows from agriculture, institutions and reduced demand as tight liquidity stance continues.

The market traded with high volatility to close at 1990/2090 levels.

Towards the end of last week, the local currency traded flat against the dollar on a thin trading session as traders squared their positions ahead of the weekend. Market closed at 1993/2093 levels.

During this period, dry money markets continued as overnight rates trades at highs of 30 per cent and lows of 22 per cent with expectations to ease in the near future as maturities from government securities and month end flows enters the market.
Source: Daily News, reported from Dar es Salaam, Tanzania
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