Tanzania: Shilling sinks to four months low

The shilling has sunk to four months low last week following heavy demand of US dollars from energy and manufacturing sectors.

The shilling crossed that level in this May. The national microfinance bank said the market closed last Friday around 2,148/2,208 levels following mounting pressure from importers.

“Continued dollar demand from retailers and manufactures weighed on the local currency (Friday’s) volatile trading session” NMB said in e-Market report. 

Another bank has it that the shilling was still under pressure from heavy demands from the energy and manufacturing sectors for the dollar.

“The local currency closed last week another 4 shillings weaker at the levels of 2179/2199 against the greenback,” CRDB bank said. While Tanzania shilling nose dived deeper, its counterpart was unchanged last Friday, with traders expecting it to trade in tight range through the session.

At 0715 GMT, commercial banks posted the shilling at 103.00/10 to the dollar, unchanged from Thursday’s close. “There has been no change overnight, it’s a dead market,” said a trader at one Nairobi-based commercial bank.

“We expect trading between 103/- and 103/20 all day.” 

He added the Kenya shilling, down about 14 per cent against the dollar this year, was unlikely to strengthen much as some companies had orders to buy dollars as soon as the local currency dipped below the 103/- level.

Both shillings may have been affected negatively after the dollar pulled away from seven-week lows on Friday, after better-than expected US inflation data kept alive bets the Federal Reserve would raise interest rates this year, and as expectations grew for more euro zone easing.
Source: Daily News, reported from Dar es Salaam, Tanzania
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