Goods export improved on account of
increase in volume and price. Similarly low demands from import sector
as oil and manufacturing companies build up shilling positions following
recent tax payments.
The Bank of Tanzania (BoT), monthly
economic review for October shows that oil imports continue to dominate
the goods import accounting for about 28 percent.
“With Dollar inflows coming in from the
agricultural sector and low demands from the import sector, the local
currency is still making some gains against the greenback; the shilling
closed Thursday’s trading session at the levels of 2135/2175 against the
Dollar,” stated the CRDB bank market highlights. More shilling strength
is likely, although importer demand remains a risk for the TZS in the
near-term.
The NMB Bank e-market reports show that
the shilling strengthened slightly amidst sluggish dollar demand, as
importers continued to build their shilling positions following recent
tax payments.
Although the relative shortage in TZS
will prop up the local currency, resumption of demand in the near-term
remains a risk to the shilling. Likewise in the local money markets,
short-term interest rates remain stable, with excess liquidity
continuing to be felt from most market participants. Short term interest
rates trade at about 7 per cent.
The Kenyan shilling was flat on
Thursday, with traders expecting the local currency to remain in a tight
trading range. At 07:30 GMT, commercial banks posted the shilling at
102.10/20, unchanged from Wednesday’s closing rate.
The shilling has been stuck in a narrow
band of 102.00- 102.50 for weeks as importer dollar demand keeps it from
appreciating beyond 102.00 and the prospect of central bank
intervention keeps it from weakening past 102.50.
The Ugandan shilling strengthened helped
by inflows of hard currency from nongovernmental organisations (NGOs)
and subdued corporate appetite for dollars. At 0952 GMT commercial banks
quoted the shilling at 3,325/3,335, compared with Tuesday’s close of
3,335/3,345.
Charities are converting some of their
foreign currency holdings to balance their books as they prepare to
close 2015, traders said.
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