The International Monetary Fund (IMF) has recently announced that the Tanzanian shilling (TZS) has reached its equilibrium level after trading at too strong levels in 2014 and a subsequent slump in the first half of 2015.
The TZS had been driven down to its lowest level of TZS 2,325 per USD on June 24th, 2015 after trading at an average of TZS 1,660 per USD during 2014, by mainly a strong USD stated the IMF.
According to Bloomberg the Dollar Index Spot (DXY), an index of the value of the United States dollar relative to a basket of foreign currencies, strengthened from an average of USD 85.936 in 2014 to a peak of USD 100.33 on March 13th, 2015.
According to the IMF, seasonally low export incomes and high repatriation of corporate dividends by foreign companies operating in Tanzania also drove the TZS downward in the period H2-2014/H1-2015.
However, the TZS which was considered overvalued in 2014 by specialists is now close to its equilibrium level trading at an average of TZS 2,190 per USD in the last 30 days and will support Tanzania’s economic growth close to 7.0% towards the end of 2015, the IMF indicates.