TANZANIA SHILLING WEAKENS AGAINST STRONG US DOLLAR DEMAND

The shilling continued losing ground against the dollar last week due to increased liquidity and the trend is expected to continue for this week.

The local currency continued to weaken against the greenback trading session as importers demand outweighed inflows. During this period, a very high demand was noted from oil, manufacturing and telecommunication industries.

According to the Exim Bank the shilling is expected to weaken against the dollar due to high liquidity and the overall market position of the dollars.

According to the bank report, the shilling fell against the dollar where traders quoted USD/TZS 1658/1673 when the market opened and closed at 1660/1675.

It stated further that the interbank money market was liquid at weighted average rate of 4.52 per cent and 13.50bn/- was the volume traded on Friday.

The Standard Chartered Bank Daily Market Commentary said the USD/TZS pair on Monday traded fairly flat on the back of balanced flows in the market.

The same is again expected on Tuesday with a slight bias on a stronger dollar as demand starts to pick up. Low to medium price volatility was expected in the market.

The Kenyan shilling touched the 32-month low early this week under pressure from dollar buying by importers and lower hard currency inflows.

At the close of trade on Monday, commercial banks quoted the shilling at 88.90/89.00 to the dollar, compared with Friday's close of 88.80/88.90.

The Ugandan shilling remained unchanged on Monday amid weak demand and a withdrawal of excess liquidity by the central bank, and traders said it was likely to remain in a stable range this week.