The Tanzanian shilling, which had previously gained against the US dollar, is now experiencing a decline due to increased import demand and disruptions in agriculture and tourism. The Bank of Tanzania attributes this depreciation to multiple economic factors. Analysts anticipate a short-term fluctuation, but long-term trends could pose significant risks.
The Tanzanian shilling has recently started to depreciate against the US dollar, despite its strengthening throughout December 2024. The Bank of Tanzania (BoT) reported that on October 4, 2024, the shilling was valued at Sh2,721.68 against the dollar but climbed to Sh2,513.1169 by December 10, 2024, and reached Sh2,394.7558 by the year’s end. Nevertheless, this upward trend reversed by January 2025, with the shilling closing at Sh2,486.6387 and further declining to Sh2,611.786 on a subsequent Thursday.
In summary, the depreciation of the Tanzanian shilling against the US dollar is influenced by increased demand for imports, disruptions in key sectors such as agriculture and tourism, and broader economic pressures. While this fluctuation is anticipated to be temporary, economists express concern regarding prolonged depreciation and its potential impacts on inflation and costs of living. Continued observation is crucial as the economic landscape evolves.
Original Source: www.thecitizen.co.tz
