The Reserve Bank of Malawi (RBM) has said pressure on the local currency has eased, thanks to renewed goodwill and financial support from development partners following the formation of the new government.
Speaking during a media briefing in Lilongwe, RBM Governor Dr. McDonald Mafuta Mwale said the positive response from international partners has boosted foreign exchange inflows into the country, a development expected to stabilize the economy in the coming months.
“We have observed a lot of goodwill from development partners towards the new government under the leadership of His Excellency President Professor Arthur Peter Mutharika. This has translated into increased forex inflows, and we project this positive trend to continue into the foreseeable future,” said Dr. Mwale.
The Governor commended Minister of Finance Joseph Mwanamvekha for swiftly engaging Malawi’s key partners, noting that these efforts have led to firm commitments to support the country in what he described as the “four Fs” — fuel, fertilizer, food, and forex.
Dr. Mwale said a Malawian delegation will soon attend the IMF and World Bank annual meetings to secure further financial commitments. He also revealed that plans are underway to strengthen national capacity to generate foreign exchange through increased exports and economic diversification.
On the sensitive issue of currency stability, Dr. Mwale ruled out any immediate devaluation of the Malawi kwacha, saying the current economic outlook does not justify it.
“I do not see any reason for a devaluation,” he emphasized. “Our focus remains on strengthening the supply side of the economy by supporting the private sector to produce more for export and generate our own forex.”
The RBM Governor also cautioned financial institutions against engaging in illegal or speculative practices in the foreign exchange market.
“We expect sanity in the financial sector,” he said. “Banks must avoid any malpractices that could fuel parallel market activities. Any abuse of the forex market through derivatives such as forwards and options will not be tolerated. The RBM will not hesitate to penalize any bank involved in such activities.”
Dr. Mwale further urged individuals and businesses holding foreign currency for speculative purposes to release it back into the formal banking system, stressing that hoarding forex undermines national economic stability.
The central bank’s assurance comes amid growing optimism that increased donor confidence and prudent financial management will help ease inflationary pressures and support Malawi’s economic recovery.
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