Sunday, May 26, 2024

Minister of Finance Simplex Chityhola moves to tighten Foreign Exchange  by repealing Exchange Control Act (1984).

Simplex Chithyola-Banda

Minister of Finance and Economic Affairs, Simplex Chithyola-Banda, is actively engaged in addressing the issue of forex externalization, which has been causing market imbalance and impacting the stability of the local currency. In pursuit of this objective, the Minister aims to instill necessary discipline by introducing the Foreign Exchange Bill, thereby repealing the outdated and ineffective Exchange Control Act (1984).

During an interface with members of the Parliamentary Committee on legal affairs at the Reserve Bank of Malawi’s northern region offices in Mzuzu yesterday, Chithyola-Banda emphasized the significance of the meeting. He stated that it provides an opportunity for Malawi to thoroughly examine the Foreign Exchange Bill, offering clarifications and responses to ensure a better understanding of the proposed measures.

“Strengthening the legal and regulatory framework on foreign exchange operations is not only key to safeguarding our hard-earned foreign exchange but also to maintaining the value and stability of our Kwacha. Necessitated by the foreign exchange challenges the country has been facing over the years, there is now a policy shift from focusing on controlling foreign exchange transactions to regulating foreign exchange flows entering or leaving the country,” he said .

Chithyola-Banda said it is expected the Bill will help to contain leakage of Malawi hard-earned foreign exchange from the country.

Parliamentary Committee on Legal Affairs Chairperson Albert Mbawala said because of the current Exchange Control Act’s slack and weak sanctions scheme potential offenders are not deterred.

“While the Exchange Control Act does not provide for adequate monitoring of foreign exchange by authorised dealers, this Bill should address that gap. The Bill should also provide guidance on trading in reserved minerals ultimately improving availability of foreign exchange and thus supporting the stability of the Kwacha,” he said.


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