THE Shilling appreciated by slightly over 30/- since the beginning of this month, thanks to proceeds from agricultural exports. The Bank of Tanzania (BoT) data show the shilling opened the month trading at 2,162/66 against the US dollars but strengthened to 2,131/32 as of Tuesday.
The National Microfinance Bank (NMB) said the shilling started this week on the right foot backed by dollar inflows from corporate and agro-export revenues. “More dollar conversion as we approach the month end could see the shilling appreciate further,” NMB said in an e-Market statement.
However, NMB said, importer demand at cheap levels of the dollar/shilling pair will likely tame the current downward trend slightly. The shilling appreciating in this month still supported by weak inflow pillars which are seasoned-end month obligations, donor aid funds and forex from agro-exports.NMB said the shilling strengthened with greenback inflows from corporate entities and Agri exporters selling dollars and purchasing shillings to settle local obligations-taxes and salaries. Since January to date the shilling has depreciated by almost 25 per cent to 2,131/32.
The pick was in last two months after climbing to over 2,400/- a dollar. The International Monetary Fund (IMF) termed the weakening as way of the shilling to find its new equilibrium after trading too strong last year.
“The shilling, which was assessed to be somewhat overvalued in 2014, is now closer to equilibrium,” the Washington-based lender said. For other currencies, the shilling lost between 10 and 22 per cent since January.
The shilling lost 21.4 per cent to pound sterling from 2,686/11 to 3,184.73 since January. The shilling tumbled by 13.7 per cent to 2,334/54 against euro, while it also went down by almost 10.8 per cent to 20/90 versus Kenyan shilling.
Globally, the dollar index yesterday was flat and dealers said currency markets were already firmly in holiday mode, but there are concerns that the run in to the yearend may bring some volatility to the main pairs.
/Daily News.
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