Tanzania shillings depreciates against dollar
The Tanzania shilling has depreciated against the dollar, but with Bank of Tanzania economists remaining optimistic about its performance with little pressure domestically and from outside. At the start of the year, the Tanzanian shilling stood at 2,144 units to the dollar, before it marginally declined to exchange at the current 2,190 to the dollar. This is, however, far better than the June, 2015 low of 2,332 to the dollar, a depreciation of 25 per cent, last year. It has so far shed 3.2 per cent this year. William Francis, a dealer at the Commercial Bank of Africa Tanzania, said the currency would hold firm against the dollar, supported by inflows of dollars at the end of April from companies seeking to meet tax obligations and to pay salaries. “We expect these inflows to bring in some stability over the rest of the month,” Mr Francis said. On the Rwanda franc, Rencap said the currency was fairly valued because it has traded close to its fair value since 2013. “We are looking at an increase in the CBR rate by the National Bank of Rwanda. This is as a result of the May 2016 fuel price hike, which implies upside risks of inflation,” Ms Mhango said. Meanwhile the Kenyan and Ugandan currencies have gained against the dollar in the past five months, buoyed by tighter monetary policies and higher earnings. In the past week, the Kenya shilling hit 100.60 to the dollar for the first time in eight months. At the start of the year it was at 102.80, and has so far gained 1.75 per cent to the dollar. The Uganda shilling gained against the dollar on the back of a peaceful election that led to increased investor confidence, with the currency gaining 1.55 per cent since the start of the year. Prior to the election, the currency had shed close to 5 per cent as investors adopted a cautious stance. The Ugandan unit is currently trading at 3,325 to the dollar, from 3,480 in mid-January.