Corporate demand pushes down shilling

Increased pressure due to corporate demand has continued to weaken the shilling and on Monday it depreciated against the US dollar to close at levels of 2145/2185.

“We anticipate high demands from the energy, manufacturing and retail sectors, this might possibly be the continued short term trend,” stated the CRDB Financial and Market Highlights report. 

The local currency ended last week with small gains against the dollar on Friday, closing 5 shillings stronger at the levels of 2140/2180 against the Dollar.

But on Monday it lost the trend after closing 5 shilling weaker due to increased pressure from corporate demand. According to the NMB e-market report, the shilling weakened on Monday, with large USD demand seen across various sectors in the economy.

The report said further that the shilling will likely weaken further as demand persists, before the market sees a reversal as demand dwindles at higher levels of the USD/TZS pair. 

On Monday, the interbank money market volume was recorded at 31.5bn/-with the shilling exchanged at the levels of between 7.5 per cent and 3.0 per cent.

In the local money markets, liquidity remains tight as demand for short-term funds is seen trending higher, with interest rates trading upwards of 6 per cent.

Similarly the Kenya’s shilling weakened slightly in early business on Tuesday, under pressure due to some corporate demand for dollars and continuing jitters in emerging markets, traders said.

By 0723 GMT, the shilling was quoted at 105.50/60 to the dollar, compared with Monday’s close of 105.40/50. The Ugandan shilling was flat on Monday but market players were on alert for any signs of depreciation pressure after the central bank resumed its dollar purchasing programme.

At 0914 GMT, commercial banks quoted the shilling at 3,660/3,670 to the US dollar, unchanged from Friday’s close.
Source: Daily News, reported from Dar es Salaam, Tanzania
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