TANZANIA-CURRENCY Traders and local businesses hit hard as Tanzanian shilling slumps against U.S. dollar

Record ID: 148923

  • Title: TANZANIA-CURRENCY Traders and local businesses hit hard as Tanzanian shilling slumps against U.S. dollar
  • Date: 30th June 2015
  • Summary: DAR ES SALAAM, TANZANIA (JUNE 29, 2015) (REUTERS) OVERHEAD VIEWS OF MARKET TRADERS SORTING CLOTHES AND SHOES SHOPPERS BROWSING THROUGH STORE VARIOUS OF TRADERS INSIDE CLOTHES SHOP TRADER COUNTING TANZANIAN SHILLINGS (SOUNDBITE) (English) MOHAMMED SURI, TANZANIAN TRADER SAYING: "When the dollar comes high, it affects us because we should have to buy these clothes out of the country, in India. And we pay in dollar, you know." TABLES INSIDE AKEMI REVOLVING RESTAURANT VIEW OF CITYSCAPE FROM WINDOW VARIOUS OF BREAD AND CAKES ON BUFFET TABLE ALCOHOL BOTTLES BEHIND BAR (SOUNDBITE) (English) PRIYA KANABAR, RESTAURANT OWNER SAYING: "Our rent is paid in U.S. dollars, so we're having to make a lot more shillings to obviously pay for our rent, and I mean, a lot of our other overheads too. Our salaries, our expat salaries are all paid in U.S. dollars, so we're just having to, yeah, having to make a lot more shilling." WINE GLASSES LINED UP NEXT TO WINDOW / VIEW OF DAR ES SALAAM HANDS OPENING TILL, PUTTING IN SHILLINGS AND CLOSING TILL MONEY IN TILL (SOUNDBITE) (English) ALEX MALLOZZI, LECTURER AND ECONOMIST SAYING: "Well, gold exports have been dropping for the last year, they've dropped by a third, and gold is the largest export in Tanzania, by far. And in the past, oil prices have been declining, and so this masked the drop in exports, because oil is Tanzania's largest import, so they cancelled. But now oil prices have been increasing, they've increased by about 25 percent since April, and so this is now really hitting the currency and the piper must be paid." VARIOUS OF SHOPPERS AND TRADERS IN STORE STREET SCENE
  • Embargoed: 15th July 2015 13:00
  • Keywords:
  • Topics: General
  • Reuters ID: LVA7B9IDVNRMYJHG1KX7ME87FLUC
  • Aspect Ratio: 16:9
  • Story Text: At the Kariakoo market in Dar es Salaam, business is getting tougher. Many of these traders import their goods, and they're getting more expensive to buy. In the last three months, the Tanzanian shilling has lost more than 15 percent of its value against the U.S. dollar.
    "When the dollar comes high, it affects us because we should have to buy these clothes out of the country, in India. And we pay in dollar, you know," said Mohammed Suri, a trader.
    The shilling's decline has also made it hard for businesses like Akemi Revolving Restaurant. They import wines and food, and the fluctuating currency is making budgeting more difficult. They are now even considering removing the shilling from menus and charging in dollars instead.
    "Our rent is paid in U.S. dollars, so we're having to make a lot more shillings to obviously pay for our rent, and I mean, a lot of our other overheads too. Our salaries, our expat salaries are all paid in U.S. dollars, so we're just having to, yeah, having to make a lot more shilling," said Priya Kanabar, Akemi Revolving restaurant owner.
    Many businesses in Dar es Salaam have been forced to keep passing the costs onto the customer. Tanzania's shilling is the one of the worst performing currencies in Africa and in June it reached a 30 year low.
    A globally stronger dollar has also hurt the shilling and other regional currencies. In neighbouring Kenya, the currency has hit lows to the dollar last seen more than three years ago, while Uganda's currency has hit all-time lows.
    Analysts say the decline in Tanzania's shilling is also due to a fall in gold exports, and a rise in the price of oil imports.
    "Well, gold exports have been dropping for the last year, they've dropped by a third, and gold is the largest export in Tanzania, by far. And in the past, oil prices have been declining, and so this masked the drop in exports, because oil is Tanzania's largest import, so they cancelled. But now oil prices have been increasing, they've increased by about 25 percent since April, and so this is now really hitting the currency and the piper must be paid," Alex Mallozzi, a university lecturer and economist.
    By late Monday, (June 29), there were signs the shilling might be stabilising. But many traders and customers say it has already cost them a huge amount in 2015.
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