AfricaPress-Tanzania: THE global consequences of coronavirus are expected to keep stressing the shilling despite a sufficient foreign reserve by the Bank of Tanzania (BoT), Orbit said.
“The depreciation is caused by halted tourism activities and lowered exports due to the coronavirus outbreak,” Orbit Securities Company Limited said in its weekly market synopsis.
According to the report, last week alone the shilling lost 25 pips to close the week at a weighted average exchange rate of 2,302/06 US dollar—the country’s main trading currency.
Although, the firm said, daily values slowed down as the days ate the week, the weekly aggregate value of transactions on the Interbank Foreign Exchange Market (IFEM) grew by 20 per cent to a total of 6.8 million US dollars.
As of February 2020, BoT said in its latest Monthly Economic Review, the country’s reserve amounted to 5.5 billion US dollars, enough to cover 6.4 months’ worth of imports.
“The amount sufficient to cover…projected imports of goods and services excluding foreign direct investment related imports,” the central bank said report showed.
On the other hand, foreign assets of banks amounted to 1.04 billion US dollars at the end of February from 958.5 million US dollars last February.
Also, fortnight ago money experts predicted that the shilling to be stressed further on the back of global oil raise after Organization of the Petroleum Exporting Countries and other OPEC+ to reach a deal to cut production to boost prices.
However, BoT said the actual impact of the virus on the economy may be felt in March.
“As the spread of the pandemic disease deeply intensified towards the end of February, the impact on the economy became visible in March,” BoT said.
The extent of the impact on the economy and policy responses taken to cushion the economy will be reported in the subsequent publications of Monthly Economic Review.
