The Kwacha normally starts depreciating after the closure of the tobacco marketing season, as the country relies heavily on tobacco's foreign currency proceeds to satisfy its appetite for imports.
The report says good economic prospects and increased level of foreign exchange reserves may cushion the magnitude of depreciation.
Reserve Bank of Malawi Governor Dalitso Kabambe recently told MBC that he expected the Kwacha to remain stable well into the lean period due to the resumption of budgetary support injections from the World Bank (last Friday, the Bretton Woods Institution disbursed US$ 84.3 million) and the European Union.
According to NICO’s report, the country’s forex reserves remained above the minimum three months. As of 31 August 2017, total forex reserves stood at US$1,027.33 million or 4.91 months of import cover, compared to 4.54 months of import cover at the same time last year.
Of the total reserves, 3.13 months of import cover were gross official reserves and while the rest-1.78 were in private reserves.
On the stock market, a total of 43.52 million shares were transacted in August 2017 representing an 81 percent decrease in share volume compared to the 230.82 million shares of July.
On the counters, FMB was the top market gainer registering a share price increase of 172.43 percent, followed by MPICO (49.17 percent increase) and TNM (39.79 percent increase).
Inflation went down to 10.20 percent from 11.30 percent in June 2017. This was mainly due to the decrease in both food inflation and nonfood inflation.
RBM forecasts inflation to reach 12.3 percent or below by December 2017 as inflationary pressures are expected to ease gradually to single digits after a normalisation of food production.