President Lazarus Chakwera’s Tonse Alliance has economically fallen as the Reserve Bank of Malawi (RBM) has adjusted the exchange rate, Malawi Kwacha from a selling rate of MK1,180.29 to MK1,700 to the US dollar effective November 9, 2023.
In a statement signed by Central Bank Governor Wilson Banda, the Central Bank says the 44 percent devaluation is due to, among other issues, supply-demand imbalances and a mismatch in the exchange rate in the cash and TT markets.
“The Reserve Bank of Malawi (the Bank) wishes to inform Authorised Dealer Banks (ADBs) that the exchange rate has been adjusted from the selling rate of MK1180.29 to a selling rate of MK1700.00 to the US Dollar with effect from
November 9, 2023.
The adjustment stems from an assessment conducted by the Bank that showed the following; Supply-demand imbalances remain in the market despite adjustments to the exchange rate through the auction system, arbitrage opportunities have resurfaced in the market due to the mismatch in exchange rates in the cash and TT markets, spot checks on some market players indicate that the market can clear import bills at this rate,” reads RBM statement in part.
The central bank adds, “The Reserve Bank of Malawi will closely monitor developments in the market to
avoid disorderly behavior among market players that may cause excessive volatility”.
Malawians therefore must brace for further economic hardship as goods and services increase.
Malawi Kwacha devaluation comes barely days ahead of the International Monetary Fund (IMF) team visit slated November 15, 2023.
The IMF team visit aims to give a clear signal on the suspended Extended Credit Facility (EFC) for unlocking donor support to Malawi.
Since assuming leadership in 2020, Chakwera has failed to contain the economic crisis that Malawi Kwacha has not been stable, high inflation, high cost of living, scarcity of fuel, forex, and essential medical suppliers.
Despite economic challenges affecting the country, Chakwera continues with global trotting while draining hard-earned taxes without remorse.
Reverend Chakwera has made 43 foreign trips with countless local trips in three years.