AfricaPress-Tanzania: THE shilling depreciated by 47 point in percentage (pips) in one week as stress on inflows intensified.
The shilling weighted average exchange rate dropped by 47 pips to 2,301/17 against a US dollars in a trading week ending last Friday.
Orbit Securities attributed the depreciation to low inflows of US dollars due to increasing stress.
“The shilling lost value as stress on inflows intensifies,” Orbit said in a weekly synopsis report.
The report said this was fourth week in a row the Interbank Foreign Exchange Market (IFEM), maintained a negative growth of the value transactions.
During the week IFEM transactions went down 66 per cent to 2.65 million US dollars from previous week’s 7.85million US dollars.
Tanzania Securities said in the interbank money market weighted average yield expected to have slightly volatility on high and low rates.
“…N otwithstanding the decrease in weighted average rate during the week we anticipate that weighted average yield to be within a range of 4.50per cent to 5.00per cent with slight volatility in the high and low rate,” Tanzania Securities said in its weekly Blast Report.
Economists have it that corona is expected to stress foreign currency inflows due to lowered exports and deceleration of tourism.
“Increasing imports and stressed tourism inflows shall put pressure on the shilling,” Mr Imani Muhingo, an economist and Head of Research and Analytic at Orbit Securities, said.
He said imports have also declined due to disrupted manufacturing patterns and global supply chain.
Imports of goods were expected to slightly strengthen in the coming weeks as China revives manufacturing after seemingly having contained the contagious virus.
