THE shilling has appreciated by 8/- since the beginning of this month thanks to inflows from commodities that cushion exporters’ demand.
The shilling yesterday, according to the central bank, closed the market at 2301/85 up from 2309/95 against the US dollar at the beginning of the month.
According to NMB’s e-Market Daily the shilling steadiness started last week and maintained its constancy throughout the week.
“The shilling continued trading flat against the dollar with inflows from commodities cushioning the appetite for the US dollars from SMEs and manufacturers that was seen,” NMB report said.
NMB, which is listed on Dar es Salaam Stock Exchange (DSE), is the largest bank in the country. Its share traded 2,340/- yesterday.
The Orbit Securities Weekly Market Synopsis report states that the shilling was resilient for the week ending last Friday, slightly halting the depreciation albeit at slower pace.
“The shilling only lost two pips during the week, to close the week at a weighted average exchange rate of 2,310/83 against a [greenback],” Orbit report said.
Orbit also reported that the value of transactions on the Interbank Foreign Exchange Market (IFEM) saw a significant deviation from a two months average of 5.44million US dollars.
As per last week the value of transactions under review grew by 68.4 per cent to a total of 9.48million US dollars, compared to 5.63million US dollars recorded during the previous week.
In a quarterly basis the Interbank IFEM, the local unit traded sideways with limited volatility for the entire quarter under review.
The shilling opened at 2,319/- to the dollar and appreciated slightly to 2,318/- before firming and close at 2,319/- against the greenback, NMB’s quarterly Market Digest report said.
“Fortunately,” the Market Digest report said, “the local unit managed to hold firm this time around owing the resilience to a well-timed increase in agri, gold exports and trade inflows.”
The inflows from these two sectors aided greatly the shilling stability in spite of the demand for dividend payments, which in recent years has led to notable depreciation of the shilling during the same period.
However, during the Q2 the volumes traded in the IFEM decreased by 18 per cent from the 79.25million US dollars traded in the preceding quarter to 64.8million US dollars during the period under review.
“IFEM members went for back-to-back customer covers as price discovery and liquidity continued to be limited in the interbank space,” NMB said.
