Experts forecast shilling stability

Experts forecast shilling stability


According to the Standard Chartered Bank Daily Market Commentary the local shilling maintained its momentum from mid last week rally against the US dollar with the trend expected to hold on as long as the liquidity situation remains stable. “But, if the liquidity strengthening occurs it is likely to see a resumption of market demand that will put pressure on the shilling,” stated the report.

Shilling stabilisation could induce money mongers to shift their investments on debt instruments like treasury bonds and treasury bills as well as overnight borrowing and repurchase agreements (Repos). The repo rates, for which most commercial banks remain the giant investors, are currently ranging at an average rate of between 21 and 24 per cent.

For analysts, stabilisation of the exchange rate is important for the net importer country like Tanzania and also as it makes it easier for businesses to function at full capacity. The Bank of Tanzania (BoT) said despite the country being a net-importer, it is very important to look critically at the level of exchange rate to go above neighboring countries dealing with similar export products.

The bank noted also that it is important to have a close eye on the performance of the shilling to strike the balance between exports, imports and other sectors like tourism which are crucial in economy.

Presently, the shilling trades at a band ranging between 1,560/- and 1,600/- against the US dollar, the rates critics see as too high but enjoying support from the central bank, which says high rates stimulate economic growth. Analysts want the shilling exchanging at between 1,000/- and 1,200/- against the dollar to check inflation.

125 billion cubic feet  natural gas produced at Mnazi Bay

MORE than 125 billion cubic feet of natural gas ...


Post your comments



Recent Posts


more headlines in our related posts

latest # news