TANZANIAN SHILLING STABILIZES AGAINST THE U.S. DOLLAR

The growing demand from corporates to meet month end obligations bolstered the shilling against the dollar to mark a positive beginning this week.

According to the NMB bank e-markets report, the USD/TZS pair traded fairly flat during Monday's session, with sluggish demand being matched by corporates converting dollars for monthend local payments.

"The shilling is poised to strengthen as more USD inflows enter the market, although sporadic dollar demand still poses some risk to the shilling," stated the report.

In the local money markets, liquidity remained fairly strong, with maturity of Treasury Bonds today adding shillings to the market. Rates averaged around 4 per cent for overnight monies, although large local payments towards the end of the month could put pressure on the shilling and cause rates to trend higher.

The Standard Chartered Bank Daily Commentary states that USD gained on the shilling as companies catered to their financial obligations. The pair should trade at similar levels today as month end inflows expected to match demand in the market with low to minimum price volatility.

Exim Bank in its market pulse said the shillings were flat against the US dollar, with commercial banks quoting USD/TZS 1664/1679 when market opened and closed at 1663/1678.

"We are expecting to gain a little bit as we approach the month end, while interbank money market was liquid at average weighted rate of 5.48 per cent and 21.7bn/- was traded on Tuesday.

The Kenyan shilling hit the lowest level on Monday since January 2012 weighed down by concerns that hard currency inflows would be hit by a slump in tourism.

The euro fell to its lowest in nearly a year against the dollar on Monday, hurt by weak German data and after comments from the head of the European Central Bank raised expectations of quantitative easing.

Germany's Ifo business climate index, based on a monthly survey of some 7,000 companies, fell to 106.3 from 108, undershooting the Reuters consensus forecast of 107, as a conflict between Russia and Ukraine took its toll on Europe's biggest economy.