Liquidity level eases in July
Liquidity levels dropped in July to a daily average of K12.35 billion from K17.35 billion in June 2021.
Quoting figures from the Reserve Bank of Malawi (RBM) in its recent Economic Report, advisory firm Nico Asset Managers indicates that access to the Lombard facility— discount window borrowing-averaged K34.27 billion a day during the month under review.
This was at an average rate of 12.20 percent and an average of K55.79 billion a day was accessed on the Lombard Facility during the month of June 2021 at an average rate of 12.20 percent.
The Covid pandemic has led to an ease in economic activities in the country and most sectors have been affected.
Associate Professor of Economics at the Malawi University of Business and Applied Sciences Betchani Tchereni said, while having a bumper yield this year, other key fundamentals such as inflation and the exchange rate, remained volatile.
“This means that trading has been affected because we have traded less. It might mean that people do not have cash, which means the economy cannot grow [as projected],” he said.
During the month of July 2021, the local unit, the Kwacha, depreciated against all major currencies.
The Kwacha closed the period at K812.51 against the dollar from K805.59 in June 2021, representing a depreciation of 0.86 percent. As of July 31 2021, total forex reserves stood at $809.97 million (or 3.24 months of import cover), a decrease from $813.77 million (3.26 months of import cover) registered at the end of June 2021.
Justin Mkweu is a fast growing reporter who currently works with Times Group on the business desk.
He is however flexible as he also writes about current affairs and national issues.
