Tanzania: Oil imports hurt shilling

oil barrels06 April 2014, Dar es Salaam – The quarter end US dollars inflows and reduced corporate demand strengthened the Tanzanian shilling this week, the situation that would last only for few weeks due to expected pressure from importers.

The local currency has been falling victim of the strong importers demand particularly from the oil and gas, telecommunication, manufacturing sectors as well as decline of official transfers.

For example, the Bank of Tanzania (BoT) monthly economic review for February shows that the share of oil to total goods imports increased to about 39 per cent compared with 33.1 per cent recorded in the year ending January 2014.

The value of oil imports rose by 27.4 percent to 4.32 million US dollars driven by an increase in volume, since prices in the world market declined.

According to the National Microfinance Bank (NMB) e-market report, the shilling continued with the gains against US dollars on quarter end USD inflows and reduced corporate demand.

“We expect the after quarter end effect to diminish as demands picks up ahead of the week.

The market on Tuesday closed at 1624/1654 levels,” stated the report.

The Standard Chartered Bank Daily Market report shows that the US dollar/shilling pair moved slightly down as the market experienced reduced demand which was previously posted from manufacturing and oil sector.

The pair is expected to return to its previous trading levels as well as the medium volatility expected on the coming days.



– Tanzania Daily News


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