The shilling on Tuesday continued to post losses against the greenback on the back of surged demand for dollars from importers amid relatively low supply. The shilling has since Monday lost battle against the greenback.

The local currency had previously stabilised, refusing to fall below 1,600/- against the dollar. But, the market closed on Tuesday at 1,606/-.

“The local currency has continued to post losses against the greenback on the back of continued demand for dollars by importers,” National Microfinance Bank (NMB) said on Tuesday.

Standard Chartered Bank said, “The shilling traded with some volatility on Tuesday we saw a slight upward tick in the exchange rate following some demand in the interbank market.” “…We have seen some interest return to the bond markets.

The five, seven and ten years bond, saw some interest on buying with yields moving down by 300 basic points (bps) as sellers anticipated the decline of the curve,” the bank said. Off recently, five and seven years debt securities have been oversubscribed heavily due to its high yield rates that are put to offset high inflation related risks.

In the last bond market the seven-year T-bond was oversubscribed four times after investors tendered 104.35bn/-. The central bank offered 25bn/- only. The bond had a price tag of 10.08 per cent.

Debt markets experts predict that even the Wednesday’s auction for 10 years government bond would be oversubscribed mainly by pension funds. The bond has 11.44 coupon rates and expects to have 16 per cent yield rate.

By ABDUEL ELINAZA, Tanzania Daily News

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