The shilling further depreciated against the dollar as demand continues to put pressure on the local currency.
The Standard Chartered Bank daily market commentary states that the shilling and dollar pair is expected to trade at high pressure, with the local currency again expected to further lose grounds against the dollar.
Medium price volatility is expected in the market during the week. High demand from importers particularly importation of petroleum products has been one of the factors that put pressure on the local currency leading to further depreciation.
On the other hand, the inflows from exports and donors are minimal to offset high demand for US dollars that has been hurting the shilling.
The NMB e-markets report show that the shilling started the week at a low note falling further against the US dollar on importers’ demand, which are significantly mammoth than the inflows in the local foreign exchange market. With an insignificant central bank support and the demand which seem to be enormous, the shilling is expected to extend the losses.
The Tanzanian shilling lost ground against the USD to trade at a range of between 1,630/- and 1,646/-. The BoT indicative rate for USD against TZS ranges between 1,630/- and 1,646/-.
According to Exim Bank’s market pulse report, despite losing against the world major currencies on recent days, the local currency is expected to gain in the near future after the tourism season starts picking up as well as the cotton season next month.
“Currently, demand for dollars is still high and the overall position on the market is short,” stated the report. The world currencies, especially the pound fell against the euro for the first time in three days after Bank of England Governor, Mark Carney, said surging house prices posed the biggest risk to the UK economy.
Sterling was little changed versus the dollar as Right move Plc said asking prices for London homes jumped to a record this month.
Futures traders reduced bets that the pound will rise against the US currency for a fourth week and UBS AG said investors should sell sterling against the greenback, as the market has overpriced interestrate increases.
Carney said last week the central bank is prepared to wait until next year to increase borrowing costs as there remains slack in the economy.
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