Author: ABDUEL ELINAZA
AfricaPress-Tanzania: THE shilling depreciated against US dollars by over two per cent in the year to date thanks to inflows from mining and agri-sector.
The shilling exchange rate data showed that at commercial banks opened at 2,300/- at the beginning of the year and closed at 2,349/- on Monday down by 2.13 per cent.
However, Bank of Tanzania data showed that the shilling opened the year at 2,299/97 and closed the Monday trading at 2,309/13.
Despite to drop in almost eight month, in a weekly basis the shilling held its position in the last three weeks in row. Orbit Securities said in its Weekly Synopsis yesterday that maintained stability in past three weeks.
“The shilling has maintained stability while appreciating for the third week in a row,” Orbit said.
Also, the total transactions at Interbank Foreign Exchange Market (IFEM) were 6.5 per cent higher compared to the similar period during the previous week.
NMB said through its e-Market Monday that local currency held steady against the dollar on the back of continued dollar inflows from “mining and agri-sectors”.
However, NMB said there is still an outstanding dollar demand from importers especially oil marketing companies, telecom and retail traders. “…But the current ongoing seasonal crop exports is expected to provide support to the shilling,” NMB, one of the largest lender in the land, said.
In quarter two, the shilling opened at 2,313/- to the greenback, depreciated slightly to 2,319/- which was the quarter high before appreciating to 2,314/- where the pair entered a period of consolidation.
“The local unit traded sideways with limited volatility for the entire quarter under review due to tightness in foreign currency liquidity,” NMB said in its latest Market Digest.
During Q2, the volumes traded in the IFEM decreased by 41 per cent from the 191.48million US dollar traded in the preceding quarter to 113.08million US dollars during the period under review.
“IFEM members opted for back-to-back customer covers as price discovery and liquidity continued to be limited,” the bank said.
The BoT, during the quarter, participated as a net seller for liquidity management purposes to maintain orderly money market conditions.
