By Mercy Matonga:
The government has officially laid before Parliament a motion which seeks to grant the Reserve Bank of Malawi (RBM) authority to implement new Exchange Control Regulations.
This follows the submission of a letter, dated January 21 2025, to the Clerk of Parliament.
Secretary to the Treasury Betchani Tchereni has penned it, meaning that the government is on course to present the new regulations.
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According to a letter sourced by The Daily Times, the submission fulfills the requirement outlined in Section 58(1) of the Constitution of the Republic of Malawi.
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“The Regulations, published in the Malawi Gazette Supplement dated December 13 2024, under Government Notice Number 73, provide for the following objectives: the opening and operation of foreign currency-denominated accounts at the Reserve Bank of Malawi,” the letter reads.
Ministry of Justice spokesperson Frank Namangale corroborated the issue.
“From our side, it means the RBM can proceed with implementing the regulations,” Namangale said.
Attorney General Thabo Chakaka Nyirenda also weighed in on the issue, noting that the move was a legal requirement even though Bankers Association of Malawi (Bam) had taken the matter to court.
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“This is the process that we are supposed to follow, even though the matter is in court,” Chakaka Nyirenda said.
The government says the regulations aim to regulate the opening and operations of foreign currency denominated accounts at RBM, enforce mandatory conversion of funds in these accounts, ensure compliance with foreign exchange laws and prevent illegal activities.
The provisions require public institutions and organisations to open foreign currency denominated accounts with RBM for all funds received in foreign currency.
Furthermore, institutions are obligated to convert 80 percent of incoming funds into local currency, retaining only 20 percent in foreign currency.
Access to these funds will follow strict guidelines, including specific procedures for withdrawals or transfers.
For funds used within Malawi, transfers must be converted into local currency based on the official exchange rate at the time of the transaction.
Treasury officials maintain that the introduction of the regulations marks a pivotal step in enhancing Malawi’s financial governance and ensuring the country’s economic stability.
However, Bam recently commenced court proceedings in which it is challenging the newly introduced Exchange Control Regulations.
Bam Executive Director Lyness Nkungula recently said they had referred the matter to the courts.
“I can’t say much but I can confirm,” she told our sister paper Malawi News.
The body’s lawyer, Kalekeni Kaphale, also confirmed that they had taken legal action.
He said the association was seeking “a judicial review of several aspects of the regulations in question”.
At the time, Namangale indicated that they knew that bankers had gone to court.
“It is true that the Bankers Association of Malawi has gone to court to challenge the New Exchange Control Regulations, which were duly gazetted on December 16 2024,” Namangale said.
