Malawi’s gross official foreign exchange reserves dropped to a historic low of $70.3 million (0.28 months of import cover) in August 2025—less than half a position it was at the start of the year.
However, the reserves recorded partial recovery by December, according to statistics published by the Reserve Bank of Malawi in its latest Financial and Economic Review.
The report shows that, at the close of 2023, reserves stood at a relatively healthy $240.5 million (0.96 months of import cover) in December — the highest point in that year—after fluctuating between a low of $121.3 million (0.49 months) in May and a peak of $194.8 million (0.78 months) in June.
The year 2024 opened with reserves at $177.2 million (0.71 months) in January, but the trajectory gradually softened, closing December 2024 at $163.9 million (0.66 months).
The real crisis unfolded in 2025, when reserves began the year at $180.4 million (0.72 months) in January and briefly climbed to $183.4 million (0.73 months) in February.
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From March, however, the decline was steep and, by April, reserves had crashed to just $99 million (0.40 months)—a fall of $84 million in two months.
The freefall continued into August, when reserves bottomed out at $70.3 million (0.28 months), the lowest recorded figure across the entire three-year period covered by the report.
According to the Bridgepath Capital Malawi Monthly Economic Report for March 2026, total reserves fluctuated sharply throughout 2025, opening the year at $536 million (2.1 months of import cover) in March before declining to a low of $511.8 million (2.0 months) in September.
Economist Marvin Banda warned that Malawi’s chronically low foreign exchange reserves reflected deep structural failures that no IMF programme or tobacco season could fix on their own.
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“Persistent fiscal deficits, an insatiable import appetite and weak exports continue to erode external buffers,” Banda said.
Economics Association of Malawi President Bertha Chikadza said a successful outcome from ongoing engagements with the International Monetary Fund (IMF) could help restore confidence among development partners and unlock additional aid inflows, which would ease the country’s foreign currency situation.
Chikadza added that the opening of the tobacco marketing season would provide a temporary boost to foreign exchange reserves, though gains remain dependent on this year’s pricing.
Treasury Spokesperson Williams Banda said the government expected forex reserves to grow in the medium term, buoyed by new health sector investments and tightened foreign exchange management regulations.
“The improvement is due to effective enforcement of the new forex management measures. We will also be implementing a health sector project worth $900 million, which will significantly boost our forex reserves,” Banda said.
