The shilling continued to strengthen
against the US dollar, thanks to the inflows of proceeds from the
agricultural produce exports and non-governmental organisations (NGOs).
“With improved agricultural inflows and
tight liquidity, further strengthening is likely,” the NMB Bank said in
its e-market report that indicated exchange rates of USD/TZS 2,105/2,185.
NMB Bank said the shilling strengthened on Monday with a support of
greenback inflows from NGO’s and Agricultural sector as well as tight
liquidity in the local money market.
According to the report, liquidity
tightness is still evident in the local money market with most market
participants looking for short term funds with interbank overnight
borrowing rates at the highs of 40 per cent.
The shilling has been on the gaining
side in the last few weeks after the government received 200 million US
dollars from China Development Bank, in addition to 100 million US
dollars from the World Bank and 77 million US dollars from African
Development Bank.
The Bank of Tanzania (BoT) Governor Prof
Benno Ndulu said in an interview with the Daily News recently that the
funds received were sufficient to bolster foreign-exchange reserves and
plug budget deficit.
The government shelved its plan to raise
600 million US dollars through a private placement managed by the Rand
Merchant Bank of South Africa to bolster its foreign-exchange reserves
and plug budget deficit due to Greek eurozone crisis.
The Exim Bank Market Pulse on Friday quoted the shilling trading at 2125/2185 at the opening and closing of the market
The Kenyan shilling was a touch weaker
in early trading on Monday due to spillover demand for dollars from last
week as traders eyed possible central bank action to stem its
depreciation.
The shilling has been under pressure
from the global strength of the dollar, a slide in valuable tourism
revenue and a widening current account deficit.
Source: Daily News, reported by Sebastian Mrindoko, from Dar es Salaam, Tanzania
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