Malawi’s gross official reserves continue to dwindle, with figures from the Reserve Bank of Malawi showing that, by April this year, the reserves dropped to 0.8 months’ worth of imports.
This is a 0.1 percentage point drop from 0.9 months in March and 2.2 months shy of the internationally recommended three months.
In its April 2022 Monthly Economic review, RBM says gross official reserves fell to $190.5 million from $214.9 million registered at the end of March.
RBM estimates that total foreign exchange reserves slightly improved to $594.4 million at the end of the review month from $590.3 million registered in March 2023 and compared to $711.3 million recorded in a similar month in 2022.
“The increase was attributed to a rise in private sector reserves, which outweighed the decline in gross official reserves,” the report reads.
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During the same month, the merchandise trade balance was estimated to have worsened to a deficit of $33.6 million (K34.8 billion) from a trade gap of $9.4 million (K9.9 billion) realised in March 2023 but the situation was relatively better compared to a shortfall of $161.4 million (K133.2 billion) recorded in the corresponding month in 2022.
“The outturn was on account of a decline in exports of 39.5 percent, coupled with a growth in imports of 4.2 percent.
“Exports dropped to $32.9 million (K34.1 billion) in the review month from $54.4 million (K56.3 billion) recorded in March 2023 and compared to $46.1 million (K38.0 billion) registered in a similar month in 2022,” the report adds.
Financial Market Dealers Association President Leslie Fatch said Malawi should expect more proceeds from tobacco due to improved volume and price.
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“Projections from authorities indicate that we should anticipate a better year but such amounts can be overshadowed by the apparent huge demand backlog that continues to exist,” Fatch said.
Reserve Bank of Malawi Governor Wilson Banda also expressed hope that proceeds from tobacco will improve the situation.
“Tobacco is giving us some foreign exchange but we just need to make such inflows permanent rather than temporary,” Banda said.
