FOREX

USD supply up

The supply of the United States dollar increased at the Interbank Foreign Exchange Market during the week ending Monday, February 28.
During the trading, a total of USD 9.05 million was traded, double the trading last week. 
Despite the rise in the supply of the USD, the Tanzanian shilling has not changed much. It traded at 800.19 shillings per dollar last week while this week the shilling was at 800.51 shillings per dollar, an increase of only 0.32 shillings per dollar in a week.
The increase in the supply of USD at the IFEM is partly explained by the increase in export earnings during the month of December 1999 and the inflow of foreign currency from investors who are investing in local companies. 
But the stability of the Tanzanian shilling may be shaken up by the increase in oil prices the world over. The increase in oil prices will automatically affect the whole economy, especially developing and non-oil producing countries, and this will be reflected in both increases in prices of consumer goods and the falling of the local currency in relation to other stronger currencies such as the dollar.
A total of USD 9.05 million was supplied at the IFEM and dollars absorbed at an average exchange rate of 800.51 shillings per USD.
The market started by auctioning USD 1.7 million on Tuesday, all of which was at an average price of 800.45 shillings per USD. The following day, all the USD 2.6 million supplied at the market was sold at a rate of 800.57 shillings per USD.
On Thursday again, all the USD 3.6 million offered for sale at the market was purchased at an average rate of 800.50 shillings per USD, while on Friday, all the USD 0.35 million supplied was absorbed at the rate of 800.75 shillings per USD.
The last day of the trading Monday saw all the USD 0.8 million supplied being absorbed at an average rate of 800.75 shillings per USD.
Meanwhile, the shilling has remained relatively stable at both the bureaux de change and commercial banks as revealed by the results of a survey carried out by The Express.
The dollar is trading at an average of 804 and 801 at the bureaux and commercial banks, respectively.