The Malawi kwacha sunk to a new low on Friday, trading as high as K615 to the green buck as pressure continues to mount on the local currency.
And reports are now rife of customers failing to buy forex from banks, a development that could be a result of the dealer banks hoarding forex in-order to suppress supply and induce continued depreciation for their profit making.
A visit to the central business district of Blantyre on Friday revealed that the dollar continues to be a scarce commodity on the market with most foreign exchange bureaus selling the green buck at between K610 and K615.
Ironically, the development is happening at a time when the tobacco market remains open, with a total of US$317 million generated as of Wednesday last week.
It is also happening at a time Malawi is still sitting on a relatively healthy foreign exchange position of above three months of import cover.
According to Reserve Bank of Malawi data, the country’s official foreign reserves stood at US$682.98 million or 3.27 months of imports as of Wednesday, September 2.
In its financial markets developments report for Friday, June 4, 2015, RBM says, however, gross official reserves dropped during the week ending August 28, 2015 as monetary authorities continued to sell foreign exchange to facilitate importation of strategic commodities such as fertilizer, petroleum and maize into the country.
Analysts have been pressing the monetary authorities in recent weeks to consider pumping into the market a considerable amount of forex as one way of reducing pressure of demand for the foreign exchange and help slowdown the depreciation of the kwacha.
The depreciation is hurting importers as well as students studying with international bodies as they pay more kwachas than planned to buy foreign currency.