Falling Inflation Eases Pressure On Shilling Appreciation

January 2008 | Market Strategy

We see further Tanzanian shilling appreciation ahead on the back of a falling current account deficit and forecast year-end targets of TZS1,080/US$ and TZS1,050/US$ in 2008 and 2009. Easing inflation should reduce the central bank's desire to engage in liquidity clearing operations, which should, in turn, reduce the currency's likelihood of another very sharp appreciation.

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