Tuesday, May 28, 2024

Economic Expert Tchereni Warns Against Devaluation as Solution to Foreign Currency Crisis

Dr Betchani Tchereni

Economic Expert Dr. Betchani Tchereni has tipped government to tread carefully when making the decision to devalue the Kwacha in aligning the local currency with the foreign currencies particularly the US Dollar. According to Tchereni, people prefer selling their currencies on the black market instead of through authorized dealers due to higher selling prices in the informal market. Consequently, this situation poses challenges for the government in acquiring sufficient foreign exchange reserves to finance essential commodities like fuel.

While devaluation may seem like a straightforward solution to align the Kwacha with other currencies, Dr. Tchereni highlights that implementing devaluation in a primarily import-dependent country brings about additional problems for the general population. Instead, he suggests that declaring exports through the Reserve Bank of Malawi could be a viable approach to address the foreign currency problem.

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