Shilling wobbling slowly
THE Tanzania shilling has continued to weaken against the United States dollar, though slowly, at the Interbank Foreign Exchange Market of the Bank of Tanzania.
BoT reports on Monday and Tuesday this week show that the shilling traded at an average value of 815.98 shillings per dollar and 816.95 shillings per dollar in the two days respectively.
The slow movement of the shilling downwards shows a fall which, although slow in pace, could in the long run result into a significant gap.
What makes this fear carry weight is a weekly comparison from Monday and Tuesday last week when the shilling traded at an average value of 814.49 shillings per dollar, marks relatively far from this week's standing.
An economist with the government, James Chalya, said the fall could not be so serious had BoT not interfered with normal currency supply and demand mechanism.
Chalya said the food hunger in the country forces the government to import into the country and creating an urgent need for huge amounts of foreign money to meet the import bill.
To control the local currency from falling further, BoT, according to the economist has to buy more dollars when the supply is big and supply more when the demand goes up.
"All these happen in order to control the fall of the local currency from further decline," Chalya said in an interview
Now that people have started harvesting in some parts of the country, economists are optimistic the situation quash the government's urgent need for dollars and subsequently lead to the appreciation of the shilling.
For many months now, all the dollars being auctioned at the BoT is bought thus pushing the local currency down.