Shilling retreats but on track for gain

DAILY NEWS Reporter

THE shilling has gone down by slightly over 30/- against the US dollar since the beginning of the year to yesterday. It stabilized in the last six weeks due to an increase in dollars inflow from exports which eased pressure on the local currency.

The shilling opened the year trading at 2,161/46 but as of yesterday it closed the session exchanging at 2,192/86 a greenback, which was a gentle slide compared to last year. The Bank of Tanzania data showed that since the beginning of this month, the shilling went down by less than 1/- from 2,191/09 to 2,192/86 of yesterday.

On foreign exchange market the shilling stood firmly on Tuesday to close the session at 2,177/2,207 levels due to the month end dollar flows. On day-to-day basis the shilling, according to CRDB, held steadily for the last five days as it matched demand and supply in the market.

The market is currently experiencing dollar inflows from corporate who are meeting their end of month obligations. However, another industrial player have it that the shilling may appreciate as end month obligation will push up the local currency, despite edging low against greenback on Wednesday. National Microfinance Bank (NMB) said “as we approach month end, we expect inflows to improve in favour of the shilling.”

The bank predicted that the shilling might hold to end month as the inflows “can be expected as we start seeing month end dollar flows.” Another bank, Standard Chartered, said the shilling stability continued being the story in the foreign exchange market, despite some greenback demand from corporate.

“The market seems to have sufficient liquidity to support said demand, and going into month end this continues being the expected trend,” StanChart said in a market report of Tuesday.

BoT said in March’s Monthly Economic Review that value of exports of goods and services amounted to 9,636.2 million US dollars compared to 8,983.2 million US dollars in the corresponding period in 2015.

“This was mainly driven by improved performance in travel receipts owing to increase in tourists,” BoT’s report says.