Friday, March 24, 2017

Shilling exhibits firmness in three weeks

DAILY NEWS Reporter
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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