THE shilling is steadily losing ground against the US dollar as acute demand for the greenback from various key players in the market has continued to exert pressure on the local currency.
The local currency slipped against the US dollars this week when compared to the previous week. NMB e-markets report says as the demand for the greenback seem to be enormous, the shilling continued to nosedive in today's trading session closing at 1657/1690.
"Further fall is likely if flows will not be enough to snatch the demand," stated the NMB e-market report yesterday in Dar es Salaam. Similarly, the local money market is significantly liquid with overnight lending rates going down to the highs of 10 per cent.
The Standard Chartered Bank in its Daily Market Commentary says, the dollar continues to gain on the shilling with minimum volatility in the market.
With more payments to be made it is expected the shilling to further depreciate as businesses cater to pending payments. According to the Market Pulse by Exim Bank, the shilling depreciated against the US dollar with commercial banks quoting USD/TZS 1657/1672 when market opened and closed at 1658/1673.
The shilling is expected to depreciate a little more due to the high market demand, while the interbank money market was liquid at weighted average rate of 11.67 per cent and 30.4bn/- was traded on Monday.
On the Kenyan markets, the Market Pulse report states that the Kenyan shilling weakened on Monday after banks bought dollars to cover short positions.
In the international markets, the dollar held gains against major peers as signs of economic recovery supported the case for the Federal Reserve to raise interest rates. The pound dropped to a four-month low versus the dollar after UK inflation slowed.