Shilling strengthens as demand for dollar declines
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Experts have attributed the slightly strengthening of the Shilling against dollar to positive forces in the balance of payment as well as “possible” intervention from the central bank and end of the month salary payment something that has decreased greenbacks demand.
Dar es Salaam. The Tanzanian shilling yesterday slightly appreciated against the dollar compared with the past week, thanks to a decrease in demand for the greenback.
A random survey in some Bureau de Change around Dar es Salaam yesterday established that the dollar was sold at a maximum price of Sh2,399 from Sh2,410 last week. The last time the shilling fell below Sh2,400 to the dollar was in June 2015.
Mr Sameer Milo, the managing director of Dar es Salaam-based FX Bureau de Change, said: “The currency has slightly strengthened against the greenback and this has automatically pushed down the bureaux quote rates. We just have to wait and see what next week has in store for our currency,” he said.
The Bank of Tanzania’s (BOT) foreign exchange rates summary showed the shilling being sold at Sh2,300 while the interbank foreign exchange market report also showed that the dollar was exchanged at a rate of Sh2,312.
In its monetary policy statement published in the previous week, BoT maintained that the value of the shilling against the dollar remained broadly stable throughout the first half of 2018/19.
In late January, this year, BoT said the shilling was not in a crisis, explaining that the current movement was a seasonal phenomenon related to low foreign exchange earnings from tourism and exports.
“This is a common trend that usually normalizes during the second half of the year when earnings from tourism and exports pick-up,” reads the central bank’s statement in part.
Prof Delphin Rwegasira from the University of Dar es Salaam Economic Department said that there was no reason to believe that the shilling would continue to be weak, and that the slight appreciation was a sign that it would go back to normal.
“During this month’s export it is normally slow but perhaps there has been a positive force from the balance of payments, which might have strengthened the shilling against the greenback,” he explained.
