Tanzania's shilling strengthens on weak demand

The shilling slide by 1.25 per cent to 2,188/58 in the first week of this year as demand for the US dollars starting to pick up.

The Bank of Tanzania (BoT) foreign exchange data showed that the shilling opened the year exchanging at 2,161/46 but slid to 2,188/58 of yesterday.

Though on weekly basis the shilling weakening, it has strengthened last Friday as importers exhibit low demand to enable the local currency to settle at 2,145/2,203 levels.

National Microfinance Bank (NMB) attributed the stabilisation to importers from the oil and manufacturing sectors who exhibited lower appetite for the greenback.

“Dollar inflows from institutions increased slightly, and these may also strengthen the shilling in the short-term,” NMB said on its e-Market report.

The shilling started January 2015, trading on the right foot after gaining on average by 0.57 per cent to 1713/47, but failed to maintain the pressure from foreign currencies and closed the year down by 25 per cent.

Meanwhile, Kenya’s shilling was stable against the dollar yesterday but traders said they expected it to come under modest pressure during the week due to increased importer demand.

At 0728 GMT, commercial banks quoted the shilling at 102.20/30, the same as Friday’s close. “Going into this week, we expect there will be some pressure on the shilling.

The demand (for dollars) should pick up. Most corporate clients have come back to work,” a senior trader at one commercial bank said. Typically demand for dollars comes from the energy sector, manufacturers and telecoms firms.
Source: Daily News, reported from Dar es Salaam, Tanzania
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