The private sector has proposed a further ease in monetary policy stance, saying lower borrowing costs and improved access to credit are critical to reviving investment and economic growth. In its economic and Business Review for the first half of 2026, the Malawi Confederation of Chambers of Commerce and Industry (MCCCI) says the Reserve Bank of Malawi (RBM) should consider a gradual reduction in policy rates.
“As inflation continues to moderate, the RBM should consider a gradual easing of monetary policy, provided that money supply growth remains contained and external risks,” the report says.
During the first quarter of 2026, the RBM Monetary Policy Committee (MPC) reduced the Policy Rate from 26 percent to 24 percent in a move aimed at lowering borrowing costs and stimulating private sector investment.
However, the central bank maintained the rate at 24 percent in April while increasing the Liquidity Reserve Requirement (LRR) for local currency deposits from 10 percent to 12 percent to absorb excess liquidity in the banking system.
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According to MCCCI, the policy mix reflects the central bank’s balancing act of supporting economic recovery while guarding against resurgence in inflation.
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Meanwhile the review shows that private sector credit remained resilient during the first quarter of the year, with annual credit growth easing slightly to 37.2 percent in March from 38.8 percent in February but remaining well above the 17.8 percent recorded in March 2025.
Economist Velli Nyirongo noted that high borrowing costs have made it difficult for businesses to invest, expand operations and create jobs.
“This could stimulate private sector activity, which is essential for sustainable economic growth,” he said.
In an earlier interview, RBM spokesperson Boston Maliketi Banda said the central bank was maintaining a tight monetary policy stance as inflation remained above its medium-term objective.
