Bloomberg News

Tanzania Shilling Gains, Paring Decline as Bank Sells Dollars

October 28, 2011

Oct. 28 (Bloomberg) -- Tanzania’s shilling headed for its first gain in seven days against the dollar after the Bank of Tanzania sold the U.S. currency.

The shilling traded up 2 percent at 1,780 per dollar at 12:36 p.m. in Dar es Salaam, Tanzania’s commercial capital, paring its weekly retreat to 4 percent.

“The central bank has intervened and sold dollars, that caused the shilling to appreciate,” Yonoh Mtengule, chief economist at National Bank of Commerce Ltd., ABSA Group Ltd.’s local unit, said by phone today from Dar es Salaam.

Joseph Masawe, director of economic research and policy at the Bank of Tanzania, declined to comment when contacted by phone today. Governor Benno Ndulu may call a press conference next week to say what measures he has put in place to support the shilling, according to Masawe.

The shilling had lost as much as 1.6 percent earlier today as banks purchased dollars to cover their positions, said Fred Siwale, a trader with Cooperative Rural Development Bank Plc.

Tanzania’s shilling is Africa’s second worst-performing currency this year after Kenya’s shilling, having lost 16.6 percent against the dollar. Tanzania’s inflation rate climbed to 16.8 percent in September on higher energy and food costs.

--Editors: Ben Holland, Steve Bryant.

To contact the reporter on this story: David Malingha Doya in Dar es Salaam at dmalingha@bloomberg.net.

To contact the editor responsible for this story: Emily Bowers at ebowers1@bloomberg.net.


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