The Reserve Bank of Malawi (RBM) has ruled out any immediate plans to devalue the Malawi Kwacha, saying foreign exchange inflows have improved significantly following the recent elections.
Speaking at a press briefing in Lilongwe, RBM Governor McDonald Mafuta Mwale said the central bank has observed renewed goodwill from development partners towards the new government led by President Professor Arthur Peter Mutharika.
Mwale said this confidence has already translated into increased foreign currency inflows, a trend expected to continue in the foreseeable future.
“There is no reason for a devaluation. We have seen rising forex inflows and growing confidence from our partners. We will continue supporting the private sector to produce for export and generate our own forex,” said Mwale.
The Governor commended Minister of Finance Joseph Mwanamvekha for swiftly engaging international donors and institutions, saying their support focuses on the “four Fs” – fuel, fertiliser, food and forex.
Mwale and the Minister are set to attend the upcoming IMF and World Bank annual meetings, where Malawi hopes to secure further commitments to strengthen its economic position.
At the same time, Mwale warned commercial banks against malpractices in the foreign exchange market, particularly activities that fuel black-market trading.
“Any abuse through derivatives such as forwards and options will not be tolerated,” he cautioned. “The RBM will not hesitate to penalise any bank found engaging in such practices,” added Mwale.
He also urged those holding forex for speculative reasons to release it to authorised dealer banks, assuring Malawians that the central bank remains confident in the country’s economic stability.
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