Govt Crackdown on Illegal Forex Traders Sparks Malawi Kwacha Gains

The recent depreciation of the United States Dollar (USD) against the Malawi Kwacha has been attributed to the ongoing crackdown on illegal forex traders by law enforcement agencies, according to economic expert Edward Masoambeta.

Masoambeta says the intensified clampdown has pinned down illegal forex traders, creating a free flow of foreign currency as people fear engaging in black market activities.

“The action by law enforcers has instilled fear among illegal traders, forcing many to abandon the market. This has resulted in the improved availability of forex,” Masoambeta said.

However, he suggested that the Reserve Bank of Malawi (RBM) should consider removing certain restrictions on forex access to enhance its availability in commercial banks.

RBM spokesperson Boston Maliketi Banda disclosed that the government will soon announce measures aimed at ensuring sustained forex availability.

Over the past two weeks, the USD has significantly depreciated on the black market, dropping from over K5,200 to around K3,000 per dollar, offering relief to many businesses and consumers.

Market analysts attribute the trend to increased forex supply following the crackdown, with hopes that the measures will stabilize the foreign exchange market in the long term.

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