Malawi Kwacha continues to weaken against Dollar

Malawi currency, the Kwacha has continued on its weaker path onslide against major foreign currencies, and is now being sold in cash at K595 to a dollar according to foreign exchange bureau rates report from Reserve Bank of Malawi (RBM) while on the parallel market or black market it is hitting around K700.

Free fall Kwacha

Free fall Kwacha

Weakening Kwacha

Weakening Kwacha

Central bank spokesperson Mbane Ngwira explained that the devaluation has been induced by huge demand for forex and at the same time market speculation as Authorised Dealer Banks are hoarding forex in anticipation for better rates at a later stage.

Analysts say some major cause of forex shortage is the long-term fertiliser subsidy programme. With all its good intentions—to end hunger thereby contributing to poverty eradication, the subsidy requires thousands of drums of forex to import. Since the programme started in 2005, Malawi has been spending not less than K20 billion annually on the programme.

The country’s import bill for fuel, cement, metal bars and other construction materials has spiralled, victims of our own growth.

The other cause is the unscrupulous business people who siphon forex out of this country through fraudulent import transfers, hoarding, fake holiday packages and by literally zipping US dollar bills in the trousers while on foreign trips.

The fourth cause which has been controversial before is the state travel bill.

In the opinion of economist and Press Corporation Limited group chief executive officer, Professor Mathews Chikaonda, kwacha is losing its value because the country is still not able to generate enough foreign exchange to meet its import needs.

“We need to accept our reality. Just because we are in the tobacco marketing season is not a guarantee that we will have enough foreign exchange. RBM needs to keep some for the rainy day,” he said.

He advises that instead of just being an importing nation, the government needs to seriously implement export diversification drives to help the economy cope during the lean period.

The economy is currently facing pressure on the foreign exchange market largely due to speculation despite the country still selling tobacco, which wires in about 60 percent of the country’s foreign exchange earnings.

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54 thoughts on “Malawi Kwacha continues to weaken against Dollar”

  1. Winston msowoya says:

    Please Malawians,get educated.How would your Malawian Kwacha get steam when your political stance is increasingly in tumultuous situation while the economic footing in egregious trend.In other words,it will take decades to stabilize in the sense that,the leaders you continue to elect on tribal lines instead of merit or acumen,you will remain in horrible and destructive way of life that will in the end,catapult our lovely motherland into a sinkhole of a failed state.Why can’t you learn from our brothers in Botswana or Zambia where tribalism and ethnicity are stories of the millennium.The fact of the matter is that when the nation collapses,either politically or economically,the aftermath will not choose whether you are a Tumbuka,Lomwe,Chewa,Yao Ngoni Sena,to mention a few.Mind you,United we stand but,divided we fall.Vivid instance is Congo( DCR) and Rwanda.

  2. Dwambazi says:

    No 51, so called “Defender of faith” you totally missed my point fool. Check your facts before opening your stinky mouth, thanks

  3. chibwe says:

    nyapapi ndiwandale koma udzachokapo pamenepopo ndiwe fit

  4. Defender of Faith says:

    Iwe Dwambadzi # 33: Iwe ulibe Mpingo wako kapena atsogoleri ako kuti uwatume.

  5. pio says:

    The negative effect of the Kwacha is due to the world economy, look at South Africa, Euro, Zambian Kwacha. The V effect as a result of strong American dollar.

  6. Palikanthu says:

    Peter can’t lead and economically bail out Malawi his reaction time has a 30-year lag time that is mutchona mentality

  7. Palikanthu says:

    Where is our doctorate holding advisor? Dr Phiri kindly advise the sleeping looting president

  8. angoni apaphata says:

    Some of u guys r blaming times. We r not poor nor do we lack forex. Where do you think the president was a few months ago? In America keeping up with his green card requirements. You fools still vote for these idiots.

  9. Tsamba Likagwa says:

    The two programs – Agriculture Subsidy and the Malata and Cement Subsidy are both eroding our foreign currency. It needs a straight man to end this program and look into alternatives that could bring more income to the country. If the same money was spent on Forestry, then surely within the next 3 years the country would start realising benefits.

  10. Hamu says:

    We are done now!!!!!!

  11. Charombanthu says:

    Same old story. I wonder what’s going to happen when the tobacco season ends if this free fall of the Kwacha is taking place now. What should we expect in the lean periods of November to April? Next will be fuel scarcity and then God-knows-what follows…

  12. zaya says:

    Ndi nthawi yoti mayiko kumagwilis ndalama imodzi moti pano zinayambika kale pano pa zimbabwe pompa. Apa kwasala ndi kuno kwanthu

  13. mayankho anga says:

    Prophet T. B. Joshua prophesized about the falling of currencies a couple of months ago. BUT!! The leaders of several govt that are experiencing the falling of their currencies do not want to listen to pieces of advices that the man of God Prophet T.B. Joshua gives. The president and his cabinet should be on their knees, and ask God to intervene so that our currency should be back on the track. May God of T.B. Joshua forgive the sins of this country!!!!!!!!!!!!!

  14. cashgate1 says:

    Those paid in dollars are now enjoying Malawi. Likes of iNGOs directors. Poor malawi

  15. Moses Makoko says:

    Atsamunda bwerani mud za l am u lire dziko lathu!
    Only kuti this time let’s agree on the dos and donts, a malawi zatikanika. Ngati kwa cha ikupenga fodya Ali mkati, nde akatha?

    Believe me, after their regime, we will be told in courts what exactly is happening behind the scene today. Wina akumanga mpumulo wa bafa pena pake!

  16. Economist says:

    The answer here is all about poor management at the Reserve Bank. These Reserve Bank borrowed forex from M…a to stabilise the Kwacha last time it was bleeding heavily. Now the Reserve Bank has to repay the unsanctioned borrowed dollars to M…a and consequently creating a deficit of the dollar domestically. The consequences are on you and me and long lasting………..

  17. DPP Guru says:

    Njoka samaweta Chuka mukumuwetayu akugwetsani inu a DPP. Ndamva mbiri zake zoipa. Akuti olo ma bank interest kufika 50% akumadya kapamwamba kwa Hitesh Anadkat. There is no way Chuka will reduce bank interest rates nanga adya chani. Njoka samaweta.

  18. kazeze says:

    I remember Goodall once telling us Malawians that he would be surprised if the donors did not return in the next 3 months, and the donors did not. He and the late President Bingu had just returned from a donors conference overseas then. Trust Gondwe at your own peril, especially when he is in politics, but as a pure technocrat, yes. Ndi a Kayiwonanga amenewo, forgotten the history of their mthila kuwili? A kapilikoni spirit?

  19. Njokasaweta says:

    Sinànga a MEC analephrra kunena chilungamo. ziyeni muone Mulungu mmene amawekuzira ndipo palibe amene a tsutse kumeneku ndiye kulankhula koma sitinati. Holy Ghost fire.

  20. kesterkalonga says:

    The world is finish every country is crying not only malawi even Americakkkkkk

  21. tchafinala says:

    Tayesani kuigwira dollar pànotu tatsala pang’ono kuti fuel ayambenso kusowa, sugar abale asowenso zinthutu zidula kwambiri bwana yesani ndithu ndinu munthu odziwika tamapemphani kwa anzanuwo.

  22. Dwambazi says:

    Where are the Catholic Bishops now? Is it because Chilima is one of your boys. Millions of your flock are suffering what do you have to say????? ……….ma Bishop mwadya ma bans a blue

  23. Nyatwa says:

    We voted these people into power, we have the power to take them down

  24. GUMGUM says:

    koma DPP ndi mavuto akulu

  25. steven says:

    Khalambazi zingatiuze chani chachilendo kupatula ku defender ma criticism osa defendeka basi. Things will continue to get worse until Peter Munthalika will RESIGN ON HIS OWN=Prophesy ya Liabunya is being fulfilled. People will make a revolution and DPP will finished like MAKATANI.By Middle next year you will agree with me as I do follow the prophesy coming to pass.

  26. McGoodson Ngoma says:

    shame to government penalizing innoncent and poor malawians

  27. Amos yaswera mkhochiwa says:

    We must produce many things to export so our currency it can gain

  28. Economics Graduate says:

    Government should make a list of items for which forex can be purchased. Items like tomatoes, chickes, beers, sugar, should not be on the list. Also, goverment should stop protecting companies like illovo and portland cement, allow other manufactors to come into the country, Dangote et. These guy use local raw resources to make products, how long portland will keep on importing clinker? Finally, lets start producing ethanol from sugar cane, we can redude fuel import bill with this move. All the area a long the lake can be put under sugarcan production. But we are fools in Malawi. Kuba and wakhwithuism are what we invest our energy in.

  29. me says:

    Chikaonda sometimes baffles me. He heads a large conglomerate which is busy closing manufacturing companies, closes PEOPLES at city centre and sells it to a foreign company SPAR and now mourns about the country not exporting but consuming forex. Who does he think can bring forex if he in his position cannot?

  30. nyapapi says:

    A Malawi ndife a bulutu. Ma currencies almost onse a dziko lapansi kupatula dollar atsika value,. Reason is that the dollar itself has gained strength, relative to other countries thats why Malawi Kwacha has devalued.Talk of countries like China, South Africa, Brazil, Nigeria, whose exports have flooded Malawi has devalued. South Korea which exports our Samsungs has devalued. It beats my head to hear somebody lay blame on government. It just shows how backward and illiterate we are as a nation. Not surprised though as 58% of population is illiterate, so too 99% of us commenting here. Some are saying we should be exporting more, others government has failled. Alas! Does government own farms, mines, kisosks, taxis, benches on the market, factories to export?? Its YOU and Me to blame. We are just finding dinasaur government to blame for our poverty. NO.. Some have quoted cheap, dull head Chikaonda comments……shaaaa. Chikaonda heads Press, the largest company in Malawi, bust ask him, why his company doesnt export more to bting in forex? Why he closed many subsidiaries that employed a lot of people? Sold Press Agriculture which could produce raw materials for local valued added products for export?? In addition they own National Bank meaning financial resources are at their disposal, but DULL Press, CEO Just commenting like a vendor in myself. Thats the problem, we are good at criticizing that operationalising solutions. We import toothpicks, nobody wants to start that. Companies must produce their own Forex Period. Citizens mus work hard to improve their own livelihoods Period. To think that Donors, Politicians , Government or manna from heaven will bail us out Loooo, we shall remain pauper Nyasatimes commentators who wail at somebody’s success. American economy is booming so their currency is strengthening, its a fact regardless of what any self styled economic analyst or political cahoot would say of the kwacha loss in value…..MUISOVA

  31. Masoambeta says:

    That’s good. Athu opusa mumavotela DPP. You reap what you sow.

  32. zoom says:

    No solution from the prof…himself shame.

  33. Yaya kumudzi says:

    …………SO YOU ARE JUST SITTING PWIIIIII,,,NO ANY IDEA OF WHAT TO DO. SHAME!!!!!

  34. Yaya kumudzi says:

    COMW DECEMBER 2015 = 1,020 ,HAVE MERCY ON MALAWI LORD

  35. Youn says:

    Sleepwalking.

  36. Ramsey Majiga says:

    Big up professor Peter Mutharika.

  37. chimwemwe says:

    Chuka has made deals with exporters by allowing them to retain 100% of export proceeds, these exporters are not the farmers but Limbe leaf,JTI,Africa leaf whose owners are all maforiegners. So these exporters demands higher rates for the dollars to banks so they make obscene profits at the expense of poor malawians. Local farmers are not benefitting it is these foreign companies. Until this is not reversed get ready for kwacha to be at 750 to a dollar by december

  38. Sapitwa says:

    Besides the reasons given, generally the global economy has weakened. Many currencies are tumbling. The ZAR continues to do so yet exports are many.
    China,Saud Arabia are all feeling the pinch then what more with ka Malawi aka!
    What miracle can a wise leadership do in situations like these?

  39. Nyachi says:

    I wonder if we have a functioning government to fix the economy. Why not not start manufacturing right here instead of always importing? muzakula liti? where are the economic gurus? all they know is how to siphone our hard earned taxes for nothing?

  40. daniel samarakunjuta says:

    Whyjust make another k10000 note.Thus what you are good at,goofs!!!

  41. daniel samarakunjuta says:

    Why not start morning our own steal bar?

  42. darton says:

    We will clump hands for our financia,l Godall Gondwe said so.

  43. Achimidzimidzi says:

    You people running the government, do you have any solutions?

  44. The real ujeni says:

    Who is Clueless and ignorant now, JB or Peter Muthatika? This current president of Malawi is sleeping on the job. The same sleeping he did as a cabinet minister, he has taken it to state house. Someone shake him up, the country needs his guidance.

  45. JD says:

    Beforward ndi anzake ndamene akuthithera forex, gvt please make limit on used cars imports, like 1,000 cars/ month

  46. Patriot says:

    All indications shows that the gouvernment of the “wise and dynamic leader” has completely FAILED.
    What is happening is the complete opposite of its so called DPP Manifesto.
    In actual fact, MALAWI IS A FAILED STATE.
    Zero Aid Budget has FAILED.
    All the proceeds from tobacco sales have vanishes.
    Forex cover is less than 2 weeks.
    Ndiye muone ma cadets apa trying to defend Incompetency, nanga sakudya nawo za cashgate za masiku ano. Kumalimbikira JB waba, eee MCP anadya nawo, kuseliku ma cadets wa ndi ma bwana awo akupakula osati sewero.
    Aziti tidikire 2019. By then Malawi will be worse than Greece.
    And when the Greek Economy had collapsed, we here that the Prime Minister Resigned. And fortunetely enough, Greece was Bailed out by the European Union.
    Once Malawi has Collapsed, they will cling to power for fear of being arrested.
    And there will be no European Union or IMF to bail us out.

    Malawi tulo.

    DZUKA MALAWI DZUKA

  47. bingu says:

    Pamatako pa pitala 40 mutalika

  48. Kamwendo says:

    So which is which and what’s wrong now with our courency?

  49. Cadet says:

    Chala mwamba
    Chala mwamba
    Boma ilo.
    I am pambuyo pa nkhalambazi 200%
    kkkkkkkk

    Pulizi RESIGN.

  50. Ppuunnaa says:

    Mu Ulamuliro wa yesu mavuto a kuchepa mphanvu kwa ndalama azatha. choncho tisadere nkhawa chifukwa posachedwapa yehova akhazikisa ufumu wake. (chivumbuluso 21:4).

  51. Kaka says:

    Clueless Mapwevupwevu govt slowly killing Malawians. Ukayenda ndi Mlomwe wayenda wekhadi. Titha psyiti

  52. malani says:

    Shame to our country.

  53. Nyama Banda says:

    cHONCHI AGONDWE AKUTI boma lawo anthu azidzliimbira m`banja -forgetting that people will fight them lets waiting and see Boma lodana ndi azungu munya muona china wanuyo ngati angakwanitse china alibize kuku berani

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