Tanzania: Mining Inflows Bolster Shilling

THE shilling tipped to maintain its stability thanks to noticeable inflows from the mining and non-governmental organisation (NGO) sectors.

Since the beginning of this month the shilling slightly depreciated by 0.05 per cent to 2305/05 against US dollar yesterday.

NMB Bank e-Market report said the shilling opened the week at a stable footing thanks to corporates end-month tax clearing obligations and some noticeable inflows.

"As we approach end of quarter, most corporates are clearing tax obligations with some inflows from mining and NGO sectors most noticeable. "This supply will continue to accommodate the outstanding demand from manufacturers and retailers throughout the week," NMB said yesterday.

Last Monday, the local market continues to trade steady with demand remaining significant particularly with the retailers, manufacturers, oil marketing companies and other key importers.

"Major dollar supply [was] still coming from the agri-sector and with cotton auction expected to take place this week, this will help to ease off some of the cumulative demand," NMB said last week.

Internationally, NMB reported that a global crunch for US dollar that was a hallmark of the early moments of the coronavirus crisis appears to have passed.

The latest milestone was a remarkable turnaround in financial conditions engineered by the Federal Reserve and other top central banks.

In Euro zone government bond yields made little change on Monday, with the market supported by news of rising coronavirus cases and hopes that changes to the composition of Germany's top court could lead to less confrontation with the European Central Bank.

In Britain, the sterling rose above 1.24 US dollars on Monday, recovering from a three-week low during Asian trading, helped by a weaker dollar, hopes of a Brexit trade deal and expectations of better economic data.

Britain has until the end of the year to sign a new trade agreement with the European Union, when the transition period following its exit from the bloc comes to an end.

Although much remains to be discussed, both parties have signalled progress.

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