Tanzania: Shilling Battles for Stability Amid Uncertainty

SHILLING has shown sign of stability and expected to remain at the same levels unless the market receives sizable demand.

The shilling was quoted by commercial banks buying between 2,225/- and 2,290/-while selling 2,335/- and 2,340/-against a US dollar yesterday.

TIB Corporate Bank said in its Market Update that the shilling traded stable on Monday's trading sessions with minimal activities in the interbank foreign exchange market.

"The shilling is expected to remain at the same levels unless sizable demand enters the market with unmatched inflow," TIB Corporate Bank said.

However, Standard Chartered Bank said its Daily Commentary that the shilling opened the week on the right foot after slightly appreciated against the greenback.

"(The) market saw some dollar supply from corporates but also demand was also posted from manufacturing sector," StanChart said. The bank predicted the market was expecting a low volatility ahead.

"Low volatility is expected," StanChart said in the report.

The Bank of Tanzania indicative foreign exchange market rates data showed that the shilling slightly appreciated yesterday in comparison to the beginning of this month.

The data showed the shilling opened the month at 2,267/49 buying while selling was 2,290/17. But yesterday the shilling was trading at 2,268/82 for buying and 2,291/51 selling.

The shilling wobbled last month to depreciate to historical low level and has slightly appreciated ever since. The central bank Interbank Foreign Exchange Market (IFEM) showed on Monday that the exchange high rate was 2,300/- which was experienced three days ago.

The interbank report also showed that the amount of US dollar traded yesterday at 1.10million US was lowest since the beginning of this year to be recorded at the market.

The amount of greenback sold at the inter-market on average was over 10 million US dollars a day in the first ten days of last December against slightly less than 1.0 million dollars a day in similar period today.

Historically, the shilling reached an all-time high of 2,305/- early this month and a record low of 1014/30 in December of 2004.

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