Shilling slides slightly against greenback

THE shilling has minutely kept weakening against the US dollar as currencies around the globe are waning, given the political and economic instabilities.

The shilling has, in the last five weeks to on Tuesday, depreciated slightly by almost 2/- to 2,312/74 as the greenback expects to continue to strengthen because of political instabilities.

The Bank of Tanzania (BoT) said after the Monetary Policy Committee met on Monday that the shilling was stable depreciating at merely 1.0 per cent year-onyear.

“The exchange rate was stable, depreciating gradually by less than one per cent, yearon-year,” the committee statement said.

In its weekly market synopsis, Orbit Securities said that most global currencies, including the shilling, are projected to weaken against the US dollar.

“In the short run,” Orbit said, “the shilling like other currencies is expected to remain weak against the US dollar as the political instabilities are likely to remain.” On Monday, the dollar gained against a basket of major currencies, as risk appetite waned from earlier levels, with US stocks well off their earlier highs to increase the appeal of the safe-haven ahead of a key reading on inflation later in the week.

After touching a near 20-year high of 105.01 on May 13, the index has eased back to around the 102 level, although last Friday’s strong payrolls report helped the dollar notch its first weekly gain in three.

The dollar index rose 0.333per cent at 102.430, with the euro down 0.32 per cent to US$1.0685 ahead of a European Central Bank (ECB) policy meeting later this week. However, NMB Bank said on the shilling remained steady against the greenback on Monday’s trading session as inflows support importer demands.

“Demand from importers such as OMCs [Oil Marketing Companies], manufacturers and traders continue to be supported by inflows from NGOs and agri crops such as sesame, a similar trend expected towards the end of the week,” NMB daily e-markets showed.

The domestic market closed at 2309/2349 levels against US dollars. Last month the interbank foreign exchange market transacted a total of 33.39million US dollars about 12 per cent higher than 29.64million US dollars that were transacted in April.

Elsewhere, the Japanese yen weakened 0.77per cent versus the greenback at 131.90 per dollar, while sterling was last trading at US$1.2531, up 0.34per cent on Monday.

Sterling gained ground ahead of a confidence vote on Monday after a growing number of lawmakers in Boris Johnson’s Conservative Party questioned the British leader’s authority over the ‘partygate’ scandal.

The Russian rouble weakened to 62 against the dollar on Monday, steered by internal market flows and capital controls, while stock indexes extended losses after the latest western sanctions.

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