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Financial market practitioners are associating the depreciation
of the shilling with the strengthening of American economy, which has
seen a number of currencies across the world losing value.
ACI-Financial Market Association-Tanzania Chapter
president Ivan Tarimo said the strengthening of the US economy has made
the dollar stronger, thus pushing down the value of the other
currencies.
He made the comments in Dar es Salaam, when the
association members met to exchange ideas, besides announcing the start
of searching for new leadership this month.
“Just look at other currencies like Kenyan
shilling, South African rand and some currencies of Southeast Asian
nations,” said Mr Tarimo.
Mr Tarimo, who is head of Global Markets at
Stanbic Bank Tanzania, said under such circumstances it will take
sometime for the shilling to recover against the US dollar.
“Flowing the dollar into circulation by the
central bank will only be a short term solution to the current trend.
Long term solutions like fixing the structure of the economy usually
take longer,” he said.
By Thursday, the shilling was trading at between
Sh2,015 and Sh2,030 in some bureaux de change, while in some banks the
shilling was trading at Sh2,050 against the vehicle currency.
Financial marketers hope that the situation is
still within the central bank’s control, and that is why BoT has started
taking some measures.
Tabling the 2015/2016 budget outlook of Sh22.5
trillion, Finance minister Saada Mkuya said the Bank of Tanzania (BoT)
has started taking measures, including intervening in the foreign
exchange market by issuing US dollars to commercial banks. This aimed at
increasing the amount of the currency in circulation.
Financial marketers are still confident that the
situation will be managed effectively by the body responsible with
controlling money circulation.
“We’ve not reached a point of losing control.
We’re confident the central bank will rescue our currency,” said
National Microfinance Bank (NMB) treasurer, Mr Aziz Chacha.
Mr Chacha said the situation will be a burden to
Tanzanians given the nature of the country’s economy which is net
importer than exporter, and hence whenever the local currency loses
value, prices of goods and services tend to go up.
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