THE shilling has held firmly against the US dollar in the last three weeks thanks to matching levels of demand and supply.
The shilling, according to Bank of
Tanzania statistics, opened this month exchange at 2,237/16 a greenback
and closed a yester-trading at 2,236/52.
CRDB Bank said yesterday that the
dollar/shilling pair maintained its three week stable position and
continues to show steadiness due to matching levels of demand and
supply.
“The pair is expected to maintain the
same levels towards the end of the month,” CRDB said in a daily
Financial Market Highlights. National Microfinance Bank (NMB) said the
shilling held steadily against the dollar due to balanced supply and
demand of dollars.
“We do expect similar trend couple of
days ahead unless sizeable demand or inflows from either side enters the
market,” NMB said through e-Market report.
However, in the last 12 weeks the
shilling depreciated by almost 3.0 per cent from 2,175/- at the opening
of January to settle at 2,236/- of yesterday. Prof Honest Ngowi,
economist with Mzumbe University Dar es Salaam campus, said the shilling
steadiness was welcome but the root problems of shilling yo-yoing
should be addressed.
“We [Tanzania] are net importer. Exports
earnings are not enough to cover our imports … that way the shilling
will continue to suffer against our main vehicle currency (US dollar),”
Prof Ngowi said. The economists said on the other hand the shilling
depreciation is a blessing as it makes export cheaper similar to the
percentage rate of depreciation.
“The problem is, we are net importer …
we have little to sell abroad,” Prof Ngowi said. The country imports of
goods and services declined by 13.7 per cent to 10.79 billion US dollars
while exports increased by 5.2 per cent to 9.38 billion US dollars in
December 2016.
“To a large extent, the increase came
from improved performance across the major exports, save for
manufactured goods exports that slightly declined,” BoT Monthly Economic
Review of January 2017 shows.
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