By Benadetta Chawanda Mia:
The Reserve Bank of Malawi (RBM) has announced immediate changes to rules governing the withdrawal of foreign currency by diplomatic offices and staff through authorised dealer banks (ADBs).
The changes are outlined in the newly updated Operational Manual for Cross-border Foreign Exchange Transactions.
The diplomatic entities impacted by these regulations include embassies, consulates, ambassadors, consuls, attaches and foreign employees of both embassies and consulates.
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According to communication from RBM, these diplomatic offices, upon application to an ADB that manages their foreign currency denominated accounts (FCDAs), can now withdraw a maximum of $15,000, or its equivalent, in any foreign currency, per calendar month for operational purposes.
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Similarly, ambassadors and consuls with FCDAs will be allowed to withdraw up to $3,000, or its equivalent in another currency, per month for their operational needs.
RBM spokesperson Mark Lungu said the decision was premised on improving the management of foreign exchange resources.
“This will allow holders of foreign currency denominated accounts to have access to their foreign exchange while enhancing management of foreign exchange to prevent indiscriminate withdrawals,” Lungu said.
Economist Alick Nyasulu observed that these conditions reflected the ongoing foreign exchange crisis and the central bank’s efforts to manage forex demand. He warned, however, that the constraints could lead to speculative attacks on the local currency, further destabilising the market.
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“Without addressing the core issues, such as boosting our exports’ base, these challenges will persist, though I would avoid predicting a doom situation.
“We, as a country, know what we are supposed to do to increase foreign exchange supply but are not doing it,” Nyasulu said.
To address these issues, Nyasulu proposed strategic actions to enhance export growth, strengthen oversight and governance institutions and intensify anti-corruption efforts.
“Our political leaders must transcend electoral cycles and focus on effective public service management,” he said.
