Import demand drags down Tanzanian shilling value: report

The value of Tanzanian shillings has depreciated by almost 3 percent in the past four weeks and is very likely to nosedive further, according to a local bank report.

"With the demand for (U.S.) dollars going up the 1,300 shillings level (for the dollar) is clearly seen," said the Standard Chartered Bank in its latest market report.

The value of shilling dived to its all-time low of between 1, 287 and 1,293 for one dollar this Tuesday, after opening last week 's trading session at between 1,265 and 1,274 shillings for a dollar.

The shilling depreciation is largely attributed to increased corporate demand to finance import requirement whereas there is little inflow from exports.

The Bank of Tanzania, the country's central bank, has so far refrained from intervening.

"Weaker currency makes exports competitive," said the Standard Chartered Bank, "A huge chunk of Tanzania's foreign exchange earnings comes from the agricultural sector."

So the central bank's refraining from intervening can be interpreted as an intentional move to support agricultural exports.

Source: Xinhua