The shilling strengthened significantly against the dollar on
Tuesday, supported by inflows from tourism and coffee exports, money
analysts have said.
The shilling, according to Bank of Tanzania (BoT), in the last one
week appreciated by almost 3/- a US dollar from 1,580.15 of last Monday
to 1577.98 of on Wednesday.
“…the shilling is expected to gain more strength,” NMB said in eMarket report issued on Wednesday .
The bank warned: “We could see it face pressure
from importers taking advantage of the cheap dollar to enter the market
in the coming days or to enter into forward buying contracts.”
Another bank, Standard Chartered said, the shilling continued its
appreciation against the greenback as demand for the dollar further
decreased.
“…We expect the trend to continue and volatility to remain
low,” the bank said in its daily market report.
Barclays Bank said the shilling remained relatively unchanged against
the dollar after a long weekend following public holiday.
“Tuesday saw a
quiet trading session, with low volumes in the interbank market,”
Barclays said in the daily report.
Tanzania Securities said the shilling is expected to remain strong
for the reminder of the year because of recently downtick movement in
prices and inflation.
"We are expecting Tanzania's current-account deficit to remain above 10 per cent of GDP in both 2012 and 2013, which will mean that the shilling will remain vulnerable to interruptions in aid and investment inflows," the brokerage firm said in a study named 'Equity Research Local Listed Banks.'
"We are expecting Tanzania's current-account deficit to remain above 10 per cent of GDP in both 2012 and 2013, which will mean that the shilling will remain vulnerable to interruptions in aid and investment inflows," the brokerage firm said in a study named 'Equity Research Local Listed Banks.'
The research pegged its projection on the fact that historically the
local currency held up well compared with some of its emerging market
peers.
But it warned that the shilling remains vulnerable to shifts in investor appetite due to Tanzania's high current-account deficit, which is likely to increase in tandem with the higher oil prices and higher dependence on unreliable and unpredictable farm based economy.
But it warned that the shilling remains vulnerable to shifts in investor appetite due to Tanzania's high current-account deficit, which is likely to increase in tandem with the higher oil prices and higher dependence on unreliable and unpredictable farm based economy.
Source: The Daily News,http://www.dailynews.co.tz, reported by Abduel Elinaza
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