Shilling hits record low against dollar

A dollar crunch has seriously depreciated the shilling.While indicative exchange rate by the Bank of Tanzania (BoT) was capped at Sh1,682.99 on Monday, for instance, commercial banks exchanged among themselves by up to Sh1,701 per dollar, the highest since the beginning of the year, the central bank figures show.

The shilling suffered again this week against the dollar after failing to recover the exchange rate ground it lost for eight consecutive weeks.

The shilling’s further tumble came as a defiant Finance minister Saada Mkuya told the House that there was nothing the government could do because all major currencies in Africa were in free fall, thanks to the stronger dollar.

Early January expectations that the shilling would strengthen against the dollar were dashed towards end of the month after demand for the greenback skyrocketed.

>The Tanzanian shilling is in very bad shape, so much that some analysts describe it figuratively as a currency that is in its death throes. It is cause for concern for us all, for it pains that while you could have purchased a dollar at around Sh600 in the late 1990s, you have to cough up Sh2,000 today for a single greenback.

The depreciation of the shilling against the dollar is one of the challenges in air transport.

Bloomberg
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