Malawi Kwacha hits all-time low: K520 to dollar
The Malawi Kwacha currency hashit the record low against the dollar as commercial banks quoted the local currency K520 per dollar, a loss of about 20 percent within two month.
According to official figures provided by the Reserve Bank of Malawi (RBM, two months ago the kwacha was selling at K412 to the dollar, just before the closure of the tobacco marketing season in September this year, to about K488.
Traders fear the Kwacha will be ceding further to major international currencies.
An economic expert Dr Thomas Munthali said Malawians should brace for “tough times ahead.”
“There are no signs that the Kwacha will start to appreciate any sooner and because of that prices of goods and services will continue to go up,” stated Munthali.
Small and Medium Enterprises Association (Smea) president James Chiutsi has lamented that the loss of the kwacha is threatening small businesses.
“SMEs import small machinery and materials and due to the fall of the kwacha, we are failing to buy these and grow our businesses. We would like to ask government to do what it can to ensure that the kwacha stabilises,” said Chiutsi as quoted by The Nation newspaper.
RBM Governor Charles Chuka downplayed the whingeing on weakening of kwacha against other major foreign currencies.
“There is no news that the kwacha is depreciating, because we were expecting it anyway. The country still has not managed to diversify its sources of forex,” Chuka was quoted by Business News recently.
“If exporters get the right price for their dollars, they can invest more in exports. If we continue to worry about consumers like you and me and traders, then we are missing the point,” he added.
Already prices of commodities in local markets are going up and cash-strapped Malawi should brace for more torrid times as fuel prices are expected to follow suit.
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Thats what we will experience for the next five years zopusa basi, sorry for you my brother and sister tisovaaaa! anzathu makobidi sinkhani ndikunena pano a kututuratu kuchalira kutuluka mboma 2019
On average a min of USD 5 million is traded everyday in Malawi. Forex is held by mostly four banks National Bank, Standard Bank, FMB and NBS Bank. The other banks don’t have much forex deposits so they offer crazy prices to buy forex from customers holding accounts at the 4 banks. Some greedy NGOs take advantage of this and they actually auction their dollars to the highest bidder, hence pushing the dollar rate up and up. Chuka’s is to control and police the banks and not to flush the market with dollars.
Till it hit the ground!
I cant believe Chuka could say what he said. Since when did exports in Malawi become so responsive to the exchange rate changes? What is the composition of the imported intermediate goods in the overall production in the country? Is the current account at the moment improving or worsening? A Chuka, avoid politics as you will soon be regarded as incompetent.
The problem we have is that most of the exports made the Reserve Bank of Malawi does not receive the proceeds and normally people who export our agriculture produces are foreigners and it’s one way of taking the foreign currency out of Malawi. The other way is that they bring the hard foreign currency back to Malawi in their bags and they exchange it on the black market in order to make more money and they still make more exports by using Malawians.
Musalire A Malawi izi ndi zifuna ndipo muvutika mpakana 92 billioni inabedwa nthawi ya Bingu itabwezedwa. Ndipo mukapitiliza kusankha atsogoleri olakwika Mulungu akufulatirani ndipo mubvutika kwambiri. Satana wakhalira atsogoleri a ku Malawi. We need God’s own intervention for Malawi to prosper
I Will not hésitate to call a président a failure and not ready for the job. Indeed very full. People l’île chuka should not work at rbm. He Is a papet and stupid. Betraying his profession at the expense Malawianz.shupit
This is Chuka. When he took over forex operations at RBM during the reign of Bakili as a director he adopted free foreign exchange regime when Kwacha to Dollar was at four. Six months down the line the kwacha was at 45. A year later it was 115 and Bakili felt betrayed and he fired him. This governor will not help Peter, will not help this government. The best is to fire him. Of course he is a Mlakho and it will be very difficult to do so.
I thought Bingu Daniel Phiri was totally against devaluation/depreciation whatever you call it? Why doent the sibbling follow suit?
Good politics makes for good economics, and vice versa . Someone says the only notable thing APM’s govt has done is kulowetsa ufumu wa Ngolongoliwa , kikiki .