Tanzania: Shilling Set to Steady Despite Agricultural Products Thin Flow
21 January 2021
THE shilling is expected to remain stable in the days ahead despite thin flows from agricultural sector as cashew nut season coming to an end. The shilling in the first 12 days of this year maintained its steadiness after trading at 2,309/70 yesterday compared to 2,309/90 against a US dollar at the beginning of the year. NMB Bank said in its Daily e-Market report yesterday that the local currency remained steady on Monday.
"We observed a thin flow from agri as cashew nut season is coming to an end against moderate demand from corporates and SMEs ahead of a public holiday [yesterday]," NMB, a leading bank, said.
The lender, one of the largest in the land, projected the shilling to also remain stable in the coming days. "We expect the local currency to remain stable in the days ahead," NMB's report said. Orbit Securities said the shilling weighted average exchange rate at the end of the week stood at 2,309/83 a dollar. This, according to Orbit was an appreciation of 7 (percentages in point) "pips for the shilling compared to the previous week."
The Tanzania shilling also minutely appreciated against Kenya shilling after closing Monday trading at 21/06 compared to 21/13 12 days ago. Globally, South African rand fell early on Monday, extending last week's steep decline, as the dollar strengthened on hopes of more stimulus and sharp gains in US yields. The rand slumped around 4.0 per cent against the US currency last week, as sentiment soured badly over a new peak in daily coronavirus infections and doubts over its vaccine supplies.
While China's yuan eased to a one-week low against a rebounding dollar on Monday, while many investors expect the Chinese currency to consolidate at current levels following sharp gains at the start of the year.