DAR ES SALAAM, Aug 8 (Reuters) - Tanzania’s Finance Minister Mustafa Mkulo expects the shilling to stabilise or strengthen in the medium term against the dollar largely due to exports of cotton, he said on Monday.
The unit, which hit a record low of 1,622 on July 4, was expected by traders to hold steady amid low dollar demand and a relative shortage of the local currency this week.
Tanzania’s markets were closed on Monday for a national holiday.
Mkulo did not specify when exactly he expected the local currency to start strengthening, but said the unit would gain thanks to the onset of the cotton export season.
He said the onset of the country’s cotton export season would relieve pressure on the shilling.
“The shilling should strengthen ... in the medium term,” Mkulo told reporters in Dar es Salaam.
“The Tanzanian shilling has depreciated by just 7 percent over time compared to the Kenyan shilling which fell 20 percent and the Ugandan shilling depreciated by 28 percent.”
He said the current depreciation of the shilling was caused by the strengthening of major currencies. (Reporting by Fumbuka Ng’wanakilala; Editing by James Macharia; editing by Ron Askew)