Recovering from a free-fall since September 2014 when tobacco sales closed, the Malawi kwacha has extended its gains of against the US dollar buoyed by minor export proceeds from some of the country’s commodities.
Kwacha is now trading at around K470 against the dollar, according to the central banl, but is trading between K480 and K496 against the dollar in some authorised dealer banks (ADBs).
In his State of the Nation Address last week, President Peter Mutharika said now that the kwacha has since stabilised, the currency may even appreciate soon, “because we are doing everything possible to get the economy on the right track.”
Mutharika said; “Government has put in place policies that will translate into increased exports to increase foreign exchange earnings.”
Reserve Bank of Malawi (RBM) financial market development report this week shows that gross official reserves—foreign reserves under the direct control of the central bank—are now at $586.11 million, an equivalent of 3.07 months of import cover.
The private sector reserves—foreign reserves under the direct control of consisting of ADBs own forex position and foreign currency denominated account balances of clients—were recorded at $345 million or 1.81 months of import cover.
Malawi is now sitting on forex reserves amounting to $931.24 million or 4.88 months of import cover.
Minister of Finance, Economic Planning and Development Goodall Gondwe said he Development Cooperation Strategy (DCS) which government launched recently will act as one of economic stimulation measures for elimination of poverty and resurgence of economic growth.