by The guardian reporter
The Tanzanian shilling, Africa’s second-worst performer this month, gained against the dollar after the Bank of Tanzania (BoT) intervened by
selling dollars on Monday and Tuesday to support the decelerating currency.
Interviewed traders said traders said besides the central bank’s intervention, demand from oil importers also eased.
The shilling, East Africa’s second-biggest economy currency, gained as much as 1.4 percent before trading 0.3 percent stronger at 1,834.25 per dollar by 4.26pm on Monday in Dar es Salaam, the country’s commercial capital.
That ended five days of losses and pared its decline in February to 3.4 percent, the most among 24 African currencies tracked by Bloomberg after Nigeria’s naira.
“There has been a slowdown in energy companies buying dollars, and that has removed some pressure from the shilling today,” Johnson Lujwangana, a dealer at the city-based National Bank of Commerce, said Tuesday by phone.
“Companies are also paying their shilling obligations like taxes, and have reduced their dollar purchases,” he said.
Rising demand for the US currency in an economy projected by the World Bank to expand by 7.1 percent in the fiscal year through June has added pressure on the shilling, which is down 5.8 percent this year.
The Bank of Tanzania sold dollars on Monday and Tuesday to support the shilling, Lujwangana and Hakim Sheikh of Commercial Bank of Africa (CBA) Limited said, without specifying the amount.
When contacted yesterday to specify the amount of dollars sold to support the shilling, Zalia Mbeo, spokeswoman for the central bank, told this reporter to contact the Director of Policy, Joseph Masawe, who was not available on the phone.
SOURCE: THE GUARDIAN
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