Tanzania shilling sinks 24pc in eight months

THE shilling has depreciated by almost 24 per cent in eight months since January to close the yester-market at 2,146/- a US dollar.

The drop in the first eight months of 24 per cent is four times higher than the amount of depreciation in the same period last year of slightly over 6.0 per cent to 1,668/-.

According to Bank of Tanzania data as of yesterday, though in aggregate term the shilling depreciated, on daily basis it went up by 0.28 per cent.

The BoT monthly economic report of June shows that it intervened to cool the interbank foreign exchange market after selling 87.5 million US dollars in April and 75million US dollars in May.

For sterling pound, since January to date, data from BoT shows that the shilling lost ground by almost 22 per cent to 3,275/- while sunk by almost 17 per cent to 2,400/-.

The shilling also depreciated against the Kenyan shilling after dive by 8.21 per cent to 20.55/- as of Monday. However, NMB said on its eMarket report of Monday that the shilling remained fairly stable against US dollar amidst thin trading.

The bank said demand for the shilling for month end local obligations buoyed the shilling, while importer demand from the oil and manufacturing sectors put slight pressure on the local currency.

“The shilling could weaken in the near term upon resumption of importer demand for the month of September,” NMB said.

Though the export of goods and services increased by 9.8 per cent to 9,454.5 million US dollar in the year ending May, failed to counter imports that slightly went down to 13,305.2 million US dollar from 14,050.5 million dollars of previous month, according to BoT.

BoT said the import decrease was attributed to “intermediate goods, particularly oil and fertilizers.” The shilling depreciation is blamed for pushing north prices of various imported commodities such as petroleum products and clothes.

The inflation increased from 6.4 per cent in June, 2014 to 6.5 percent in July, 2014, a situation attributed to the rise of price in different commodities as well as various services.
Source: Daily News, reported from Dar es Salaam, Tanzania
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