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Kwacha lost grip in April

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Betchani Tcheleni

The Kwacha lost value against other major trading currencies in April, 2021, Reserve Bank of Malawi (RBM) figures show.

According to the figures, during the month under review, the Kwacha was trading against the dollar at K793 from K787 in March.

The local unit was trading at K1,148 in April from K1,139 in the preceding month against the British Pound.

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The currency also depreciated against the Rand, trading at K58 in April from K55 in March and against the Euro where it was trading at K1,011 in April from K994 in the preceding month.

Economist at the Malawi University of Business and Applied Sciences (Mubas) Betchani Tchereni believes dwindling exports and the loosening of Covid travel restrictions among economies are the main reasons for the depreciation of the Kwacha.

He was, however, optimistic that the local currency would see some gains in the coming months.

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“Agricultural markets have opened and people are harvesting other crops and, on top of that, the World Bank has assisted Malawi in one way or another for growth and private sector development; as such, we expect to see some stabilisation,” he said.

A recent RBM Monitory Policy Committee (MPC) report says values of both exports and imports declined during the period, with imports declining more than exports.

It says imports outlays declined by $60.0 million to $693.1 million in the quarter under review while exports dropped by $2.7 million to $201.6 million in the same period.

“Prospects for the near-term suggest that the trade balance could improve, mainly due to increase in exports following the opening of the agricultural marketing season and a seasonal decline in imports of agricultural inputs,” the report reads.

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