The Reserve Bank of Malawi (RBM) has reacted angrily to social media speculation that the local currency would be devalued by 25 percent in the short term.
In an interview on Tuesday, RBM spokesperson Mark Lungu described the speculation as baseless.
At the weekend, some social media influencer indicated that the central bank was likely to devalue the currency by between 13 and 25 percent on recommendation from the IMF Mission that visited the country last week.
But according to Lungu, the central bank does not expect another devaluation following last year’s 44 percent devaluation in November.
Lungu has since warned people against making baseless allegations regarding the local unit, saying they have potential to cause panic in the market.
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“The IMF mission was in the country for a week from 22 to 26 January 2024. The purpose of the mission was to monitor progress of the economy after the country qualified for the ECF programme.
“It is a normal exercise for the IMF to do that. Unfortunately, there have been some speculative sentences that the IMF has recommended a devaluation of 13 percent and some say 25 percent. This is really unfortunate as it is fueling unwanted fear in the economy,” Lungu said.
In a statement after the mission, IMF Mission leader for Malawi Mika Saito said the discussions focused on recent macroeconomic developments and the implementation of macroeconomic adjustment and reforms committed under the Extended Credit Facility (ECF) arrangement approved on November 15 2023.
Saito said they discussed recent macroeconomic developments, noting that Malawi’s economic position remains challenging, but stabilisation efforts continue to get traction.
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The mission observed that real GDP growth is projected to increase to 3.3 percent in 2024 from an estimated 1.6 percent last year.
“We also discussed the authorities’ progress in implementing macroeconomic adjustment and reforms under the ECF-supported programme. These efforts will be formally assessed in the context of the first review of the ECF arrangement, which is expected to take place in the summer.
“We underscored the importance of staying the course with the programme to restore macroeconomic stability, a necessary condition to build a foundation for inclusive and sustainable growth and resilience to climate-related shocks,” Saito said.
