The Shilling slightly loses grip in May!

THE shilling has gone down marginally by 3/- against US dollar in May, a fluctuation which was insignificant for any importation of goods and services price alteration.

The shilling opened last month at 2,273/- and closed at 2,276/-, according to the Bank of Tanzania (BoT) foreign exchange data.

However, since January the shilling has been trading at a back-foot as local currency supply was not matching with greenback supply. The shilling has slipped by 1.0 per cent in the first five months to 2,276/- of yesterday from 2,241/- at beginning of the year.The local currency traded on the back-foot against the greenback … marking 1.0 per cent depreciation from being stable…” NMB said a Market Digest in this year’s quarter one.

The shilling good trading in the first three months was strengthened by a prolific cashew-nut season in the last quarter of last year. NMB foreign analysts had it that in the second quarter ending June, the requirement of hard currency will outweigh forex inflows.

“Heading to the second quarter, we expect the requirements for the hard currency to outweigh the inflows as most corporates will be ready to meet the year 2017 dividend obligations,” NMB’s Market Digest said. In a monthly basis, the shilling ended May steadily due to diminished greenback demand from importers.

The diminishing demand was the “result of enormous local month end obligations mainly tax obligations,” TIB Corporate Bank said. CRDB Bank said that Wednesday’s trading session ended with the US dollars retaining its pressure against the local currency, ending at a 2265/2297 level.

“There continues to be a mismatch in demand and supply of the greenback which results in its appreciation against the shilling.” CRDB said in is market highlights.

Currently, CRDB said, the market was dominated by the participants from the manufacturing and energy industry.