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Forex scarcity seasonal—RBM

Reserve Bank of Malawi (RBM) has said traders should not panic with the reported forex scarcity in some commercial banks of the country, rating it as seasonal.

The central bank said the situation does not pose any threat to businesses and the economy.

In the past two weeks, dollar stocks in commercial banks have been on the decline.

Commercial banks are now trading the kwacha between K740 to K745 to a dollar.

In an interview, RBM Governor, Dalitso Kabambe, said the development was not surprising.

“Normally, foreign exchange reserves would slightly go down around this time and pick up immediately we start the tobacco marketing season. So, I think that is a seasonal factor, but it is not as worrisome as one would think because our exchange rate remains stable,” Kabambe said.

“We can always support the market if need be and we will check that particular fact.

Should it be necessary, we will support the market so that we can continue to have a stable exchange rate.”

Bankers Association of Malawi president, Kwanele Ngwenya, asked for more time to investigate the situation but was quick to say that there could be variations on reasons.

A monthly economic review released by the central bank indicated that gross official reserves stood at $819.5 million at the end of December 2019, an equivalent of 3.9 months of prospective imports.

It further said the Malawi kwacha remained stable against the United States dollar and Euro but depreciated against most of its trading partners’ currencies.

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