Tanzania Intervenes to Stem Africa’s Second-Worst Currency DropDavid Malingha Doya
Tanzania’s shilling, Africa’s second-worst performer this month, gained against the dollar after traders said the central bank intervened and demand from oil importers eased.
The currency of East Africa’s second-biggest economy gained as much as 1.4 percent before trading 0.3 percent stronger at 1,834.25 per dollar by 4:26 p.m. in Dar es Salaam, the 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 Dar es Salaam-based National Bank of Commerce, said Tuesday by phone. “Companies are also paying their shilling obligations like taxes, and have reduced their dollar purchases.”
Rising demand for the U.S. currency in an economy projected by the World Bank to expand 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 Ltd. both said, without specifying the amount. Zalia Mbeo, spokeswoman for the central bank, didn’t immediately respond to e-mailed questions.