Tan­za­nia shillings de­pre­ci­ates against dol­lar

The African - - MAR­KETS -

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.

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