Tanzanian shilling maintains stability in 2021
The shilling has maintained stability throughout the year, fluctuating slightly around 1.0% since January. The local currency opened the year at 2,309/09 against the US dollar, which was almost similar to the 2,309/16 yesterday.
According to the Bank of Tanzania (BoT) daily exchange report, the shilling has kept the range of fluctuation for most of the year at around 2,309 / -. However, it was not until the middle of the year – from June to September – that it reached the limit of 2310 / -.
The best shilling moment of this year was between October and November, when it appreciated strongly against the greenback. In October, it gained to trade at 2,305 / – against the dollar before appreciating again to 2,304 / – at the end of November. The NMB Bank said demand for shillings was still dampened by inputs from agriculture, NGOs and the mining sector to help manage its stability.
“(The) demand (has been) observed from manufacturers, telecoms and oil JIs (marketing companies) with thin flows from NGOs and the mining sector to support demand. Local currency is expected to remain at the same levels in the coming days (towards the end of the year), âNMB said in one of its daily market reports this month.
According to Orbit Securities, the shilling edged down 0.02% against the US dollar to close last week at 2,309/09 against the greenback from the previous week’s close at 2,308/68. In addition, last week the volume traded on the Interbank Foreign Exchange Market (IFEM) fell more than 90% to a dismal US dollar equivalent to 4.3 billion / – from 55.10 billion / – the previous week. .
âIFEM recently exhibited low trading volume, which could mean that the banking industry has sufficient US dollar liquidity,â NMB said. The BoT said in its latest monthly economic review that, in line with an increased supply of foreign currency, the shilling appreciated slightly against the US dollar, trading at an average rate of 2,306/58 to the US dollar. in October against 2,309/62 for the US dollar. dollar the previous month.
The shilling also appreciated 0.11 percent from the 2,309/06 per US dollar recorded last October. “The expected recovery of the external sector after the effects of the Covid-19 pandemic, coupled with sustained low inflation, prudent fiscal and monetary policies and orderly operations in the foreign exchange market, will continue to support the stability of the shilling. against major currencies. The BoT report showed.
In October, IFEM was characterized by a high supply of foreign exchange mainly derived from the proceeds of mineral exports, cash crops and tourism-related activities. Total market revenue was US $ 168.7 million, slightly higher than the US $ 165.7 million traded in the previous month. The central bank participated on both sides of the forex market, with a net purchase of US $ 97.1 million, roughly the same level bought the month before.