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Shilling Depreciates Eight Weeks In Row

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Tuesday, May 12th, 2020
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THE shilling has maintained constant depreciation for eight weeks in a row, albeit insignificant, as the results from stressed inflows especially from a halt of tourism activities.

Kenya shilling coins and notes are pictured inside a cashier's booth at a forex exchange bureau in Kenya's capital Nairobi, April 20, 2016. Thomas Mukoya
Kenya shilling coins and notes are pictured inside a cashier’s booth at a forex exchange bureau in Kenya’s capital Nairobi, April 20, 2016. Thomas Mukoya

The tourism, one of the major sectors contributing to foreign exchange, received a beat from coronavirus pandemic and expected to affect the inflows.

The shilling, according to Orbit Securities, lost 12percentage in points (pips) in a week ending last Friday at the Interbank Foreign Exchange Market (IFEM).

The shilling closed the week at a weighted average exchange rate of 2,302/82 against a US dollar.

Value of transactions on the IFEM marginally grew by 6.4 per cent to a total of 8.3million US dollars compared to 7.8million US dollars.

The highest and lowest exchange rate against a greenback was 2,311/-and 2,301/20 from 2,311/-and 2,301/-s in the previous week respectively.

 The ministry of tourism and natural resources estimated that the number of tourists in this season that kicks off next month to reach 1.9 million.

However, due to coronavirus pandemic, the ministry said in its 2020/21 budget estimates the number may decline by 76 per cent to 437, 000. The drop in number incoming tourists projected to shrink the sector earnings from 2.6 billion US dollars to 598 million US dollars.

Tourism is the country’s second foreign exchange earner, raking in 2.5 billion US dollars last year compared to gold which topped the list with 2.7 billion US dollars.

Transport services came third with 1.3 billion US dollars and in fourth place was manufacturing with roughly 1.0 billion US dollars.

However, a fortnight ago, Tanzania Tourist Board (TTB), had come up with 10 strategies aimed at the continued promotion of the country’s tourism industry amid the Covid-19 outbreak.

TTB said the 10 strategies are aimed at saving the tourism industry in the East African nation from total collapse following the outbreak of the Covid-19 pandemic.

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