24 November 2017

Tanzania: Shilling Gains Ground Against the U.S. Dollar

Importers of goods and services are sighing in relief following a slight appreciation in value of the Tanzanian shilling against the US dollar.

The Bank of Tanzania (BoT) quoted US dollar's buying and selling rates at Sh2,229.90 and Sh2,245.13 respectively. This is'lower' in exchange rate terms than the Sh2,227.01 and Sh2,249.29 recorded in mid-October this year.

Inter-bank foreign exchange market summary by BoT for Wednesdaythis week showed that the shilling exchanged at a weighted average rate of Sh2,245.13 to the American dollar, lower than the Sh2,248.74 recorded at the end of last month.

The commercial banks sold the US dollar at an average exchange rate of Sh2,305 on Wednesday, compared with Sh2,303 at end of last month.

They also bought the dollar at the an average rate of Sh2,200 on Wednesday this week - as against the maximum rate of Sh2,238 a dollar last week.

Analysts say the slight appreciation of the national currency was a result of increased dollar inflows from Tanzanian exports, mainly cashew nuts - adding that the local currency will continue to gain ground due to more supply of the 'mighty' dollar.

It is expected that "the shillingwill gain ground further against the US dollar... But, how further up, I am not sure," saida dealer at the Diamond Trust Bank in Dar es Salaam.

The dealer further said that there has been an increase in dollar inflows in the market as a result of exports of some goods and services, which has reduced pressure on demand for the US dollar.

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