The amount of alluvial gold that the Reserve Bank of Malawi (RBM) has been procuring in the past months has accumulated to 200 kilogrammes (kg).
RBM Governor Wilson Banda made the revelation last week during the 2022 Monetary Policy Conference in Lilongwe.
According to goldprice.org, prices of gold have been declining on the global market reaching $53.4 per kg.
This means the country could realise $10.7 million if it were to sell the current gold stock.
Banda was reacting to a question posed by a member of the Budget and Finance Committee of Parliament, Ulemu Chilapondwa, on why the gold has not been sold to boost foreign exchange reserves.
The governor said it was not economically viable to sell the gold at the current rate.
“We have got 200kg of gold that we have amassed so far. It is a sizable amount in terms of value but for us to process that gold, to refine it, it will require sometime. We do not have the facilities in Malawi; so, we will have to take it across the borders into Zimbabwe and other countries and we are looking into this.
“The strategy is that we should amass quite a bit more so that it should be economically viable when we export it; so, we hope that in the coming months we increase our intervention in that area,” Banda said.
Currently the RBM buys alluvial gold at between K40,000 to K48,000 per gram.
Gold is one of the commodities in the mining sector expected to boost the country’s import cover.
A monthly economic review for July published by the RBM indicates that total foreign exchange reserves decreased to $769 million (3.1 months of imports) as at end July 2022 from $817.3 million (3.3 months of imports) recorded in the preceding month and $805.2 million (3.2 months of imports) in July 2021.
It says the outcome emanated from a drop in both private sector reserves and gross official reserves where the gross official reserves decreased to $373.0 million (1.5 months of imports) as at end July 2022 from $415.7 million (1.7 months of imports) recorded in the previous month, and $404.2 million (1.6 months of imports) in July 2021.