THE shilling has maintained its stability throughout the year, by fluctuating slightly at around 1.0 percent since January. The local currency opened the year trading at 2,309/09 against the US dollar that was almost similar to the 2,309/16 yesterday.
According to the Bank of Tanzania (BoT) daily exchange report, the shilling maintained the range of fluctuation trading most of the year at around 2,309/-. However, only in around mid-year--June to September--did it rise to 2,310/- boundary.
The shilling best moment in this year was between October and November when it appreciated dearly against the greenback. In October it gained to trade at 2,305/- against the dollar before appreciating further to 2,304/- late November. The NMB Bank said the shilling demand was always cushioned by inflows from agriculture, NGOs and the mining sector to assist in managing its steadiness.
"(The) demand (was) observed from manufacturers, telecoms and oil (marketing companies) OMCs with thin flows from the NGO's and mining sector to support the demand. Local currency is expected to remain on the same levels on the days ahead (toward the end of the year)," NMB said in its one of daily market reports this month.
According to Orbit Securities, the shilling lost marginally against the US dollar by 0.02 per cent to close the last week at 2,309/09 against the greenback compared to the previous week's close of 2,308/68. Also, last week the volume traded at Interbank Foreign Exchange Market (IFEM) plummeted by over 90 per cent to a paltry US dollar equivalent to 4.3bn/- compared to 55.10bn/- the previous week.
"IFEM has recently posted little trading volume which could signify banking sector having sufficient US dollar liquidity," NMB said. BoT said in its latest Monthly Economic Review that consistent with an increased supply of foreign exchange, the shilling registered a slight appreciation against the US dollar, trading at an average rate of 2,306/58 per US dollar in October compared with 2,309/62 per US dollar in the preceding month.
The shilling also appreciated by 0.11 per cent when compared with 2,309/06 per US dollar registered last October. "The expected recovery of the external sector from the effects of the Covid-19 pandemic, coupled with sustained low inflation, prudent fiscal and monetary policies, and orderly foreign exchange market operations will continue to support the stability of the shilling against major currencies," the BoT report showed.
In October, the IFEM was characterized by a high supply of foreign exchange emanating mainly from proceeds of exports of minerals, cash crops, and tourism-related activities. The total market turnover was 168.7 million US dollars slightly above 165.7 million US dollars traded in the preceding month. The central bank participated on both sides of the foreign exchange market, with a net purchase of 97.1 million US dollars, about the same level purchased in the preceding month.