Wednesday, July 17, 2024

Reserve Bank devalues the Kwacha in a bid to rescue economy

Malawi Central Bank Headquarters sitting at city centre of the country's capital - Lilongwe

The central bank of Malawi has devalued the country’s local currency with 25% against major currencies, an official statement by the Reserve Bank of Malawi indicates.

Reserve Bank Press Release on devaluation of Malawi Kwacha in May 2022

The development comes a day after talks with the International Monetary Fund (IMF) began on Wednesday in Lilongwe.

The IMF is in in the country in a make-or-break discussions with the Malawi Government as Malawi’s economy sails through turbulent waters curtsey of covid-19 which weakened Malawi’s export capacities as well as import capacities of many economies in the world among other factors.

Ahead of its visit, the IMF indicated that the previous administration that was headed by DPP’s Peter Mutharika falsified figures in financial reports that were sent to the IMF in an effort to dodge devaluation and fraudulently acquire Extended Credit Facility package from the IMF.

One of the conditions tabled by the IMF is for Malawi’s local currency to be devalued in order to support country’s efforts aimed at arresting the forex problems and resuscitate its economy.

Meanwhile, Minister of Finance, Sosten Gwengwe, has indicated that at the end of the talks with the IMF in few days ahead, the two side will hold a joint press briefing aimed at updating the public with a report on their meeting.

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