The shilling has exhibited a volatile trend and may
lose further ground in days ahead unless the market experiences increased
dollar inflows, bankers have warned.
The shilling trouble came just four days after the
government's new fiscal year that among other things mapped out strategies to
rescue the unit from further depreciations.
Commercial banks quoted the unit at 1580/1592 level
against the greenback yesterday, a drop from 1560/1575 of pervious week.
The National Microfinance Bank (NMB) said on Tuesday
that a shortage in dollar inflows was seen in the market and all the minimal
supply got snapped up by importers and banks.
"The
shilling was volatile and may lose further grounds in days ahead unless we see
decent dollar inflows," NMB said in its e-market daily report.
Standard Chartered Bank said on Wednesday the shilling
lost some ground against the US dollar on the back of demand in the interbank
market.
"Today we
expect a similar trend with low level of volatility," the StanChart said
on its Daily market report.
The Minister for Finance and Economic Affairs, Dr
William Mgimwa said the government wants to maintain a stable and market
determined exchange rate.
Meanwhile, the interbank market remains well funded
with the highest overnight (O/N) offer rate declining to 14.5 per cent from 15
per cent while the lowest offer remained at five per cent.
The average O/N
offer rate increased by 60 basic points to 11.31 per cent with reported traded
volume at 26.7bn/- a decline from 33.7bn/- traded a day earlier.
"The liquidity has materially improved on
interbank. We may see this sustained as we await government budget debating to
close before spending starts," StanChart said.
It added: "The improved condition will increase
banks confidence in investing which may see a decline in rates."
On repurchasing agreement (Repo), Barclays bank
reports in auction on Tuesday, the central bank received a total of one bid for
the seven-day repo and the same for the 14 days repo, at a rate of six and nine
per cent, respectively. Total amounts tendered amounted to 25bn/-.
Source: The Daily News,http://www.dailynews.co.tz, reported by Abduel Elinaza
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