In Summary
  • The shilling traded almost flat last week against US dollar concurrently dwindling in overnight volume traded to record a lowest volume in nine years.

Dar es Salaam. The shilling’s trading against the dollar has been almost flat since the start of this year.

Indicative rates by the Bank of Tanzania (BoT) show that the shilling traded at 2,290.0/ 2,291.02 on January 2 and 2,299.0/ 2,291.35 on Monday this week.

Inter-Bank Foreign Exchange Market (IFEM) showed that the overnight volume traded was less than $1 million since the beginning of 2019.

The transaction was between $0.6 million and $0.9 million in all the days. The BoT monthly economic review for November indicates that in October 2018, the value of transactions in the IFEM amounted to $108.35 million, up from $81.42 million the preceding month.

“The bank continued to intervene in managing liquidity and maintaining an orderly money market, with a net sale of $51.15 million, compared with net sale of $13.75 million in September 2018,” noted the report.

The shilling remained fairly stable against the dollar throughout the month, fluctuating in narrow ranges. The primary objective of the bank is to formulate, define and implement monetary policy, directed to the economic objective of maintaining domestic price stability, conducive to a balanced and sustainable growth of the national economy. On average, the shilling traded at $2,289.92 per dollar in October 2018 compared with $2,287.80 per dollar in the preceding month.

On an annual basis, the shilling depreciated by 1.8 per cent from $2,249.09 in October 2017.

“This rate of depreciation was broadly consistent with inflation differences between Tanzania and its major trading partners in realising parity condition,” noted BoT .