By Benadetta Chiwanda Mia:
The Reserve Bank of Malawi (RBM) has refuted speculation that the International Monetary Fund (IMF) has instructed the Minister of Finance and Economic Affairs to devalue the Malawi Kwacha by 60 percent.
In a statement released on Thursday, RBM Governor Wilson Banda emphasised that there are no plans to devalue the Malawi Kwacha.
“The general public is reminded to seek information on monetary policy matters from the Reserve Bank of Malawi. The bank urges the public to refrain from creating and circulating false reports that cause unwarranted speculation, panic and uncertainty in the economy,” the statement read.
Financial Market Dealers Association President Leslie Fatch said such speculations create market panic and put pressure on the local currency.
Fatch noted that in a regulated market, there are established channels for communicating exchange rate changes.
“With demand already high, these rumours prompt importers to urgently seek forex clearance for their bills, anticipating an exchange rate increase.
“The introduction of the foreign currency auction has provided a mechanism for the exchange rate to adjust when necessary. We believe these auctions will reflect market pressures at any given time, and if the exchange rate needs to move, it will be through this RBM-established auction mechanism,” Fatch explained.
On November 9 2023, the government devalued the Kwacha by 44 percent against the dollar. This followed another 25 percent devaluation of the local unit in May 2022.
