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Tanzanian shilling starts year on strong pace

Tanzanian shilling starts year on strong pace

THE shilling started the year on a right footing holding steady against the Greenback as inflows from mining and Agricultural commodity traders matched to demand.

“We see demand slowly picking as businesses resume from holidays with Small and medium-sized enterprises (SMEs) busy paying for their orders ahead of the Chinese New Year expected by the end of the month,” the NMB e-Markets report has stated.

The market is expected to be fully active in the coming days as more sectors resume from Christmas and New Year break.

The local currency maintained its stability throughout the year 2021 registering a slight fluctuation of around 1.0 per cent since January.

The local currency opened the year trading at 2,309/09 against the US dol- lar which was almost similar to the 2,309/16 as of Monday last week.

According to the Bank of Tanzania (BoT) daily exchange report, the shilling maintained the range of fluctuation trading most of the year at around 2,309/-.

However, only in around mid-year June to September did it rise to 2,310/- boundary.

The shilling best moment in this year was between October and November that appreciated dearly against the greenback.

In October gain to trade at 2,305/- against the dollar before appreciated further to 2,304/- late November.

NMB Bank said the shil- ling demand was always cushioned by inflows from agriculture, NGOs and the mining sector to assist in managing its steadiness.

“[The] demand [was] ob- served from the manufactur- ers, telecoms and oil [mar- keting companies] OMCs with thin flows from the NGO’s and mining sector to support the demand.

“Local currency is expected to remain on the same levels on the days ahead [to- ward the end of the year],” NMB said in its one of daily market report this month.

For instance, according to Orbit Securities, the shilling lost marginally against the US dollars by 0.02 per cent to close the last week at 2,309/09 against the greenback compared to the previ- ous week’s close of 2,308/68.

BoT said in its latest Monthly Economic Review that consistent with an increased supply of foreign exchange, the shilling registered a slight appreciation against the US dollar, trading at an average rate of 2,306/58 per US dollar in October compared with 2,309/62 per US dollar in the preceding month.

The shilling also appreci- ated by 0.11 per cent when compared with 2,309/06 per US dollar registered last October.

“The expected recovery of the external sector from the effects of COVID-19 pandemic, coupled with sustained low inflation, prudent fiscal and monetary policies, and orderly foreign exchange market operations will continue to support the stability of the shilling against major currencies,” BoT report showed.

In October, the IFEM was characterised by a high supply of foreign exchange emanating mainly from proceeds of exports of minerals, cash crops and tourism related activities.

Total market turnover was 168.7 million US dollars slightly above 165.7 million US dollars traded in the preceding month.

The central bank par- ticipated on both sides of the foreign exchange market, with a net purchase of 97.1 million US dollars, about the same level purchased in t

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Zanzibar current account balance ...

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Author: DAILY NEWS Reporter

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