The Malawi Kwacha currency hashit the record low against the dollar as commercial banks quoted the local currency K520 per dollar, a loss of about 20 percent within two month.
According to official figures provided by the Reserve Bank of Malawi (RBM, two months ago the kwacha was selling at K412 to the dollar, just before the closure of the tobacco marketing season in September this year, to about K488.
Traders fear the Kwacha will be ceding further to major international currencies.
An economic expert Dr Thomas Munthali said Malawians should brace for “tough times ahead.”
“There are no signs that the Kwacha will start to appreciate any sooner and because of that prices of goods and services will continue to go up,” stated Munthali.
Small and Medium Enterprises Association (Smea) president James Chiutsi has lamented that the loss of the kwacha is threatening small businesses.
“SMEs import small machinery and materials and due to the fall of the kwacha, we are failing to buy these and grow our businesses. We would like to ask government to do what it can to ensure that the kwacha stabilises,” said Chiutsi as quoted by The Nation newspaper.
RBM Governor Charles Chuka downplayed the whingeing on weakening of kwacha against other major foreign currencies.
“There is no news that the kwacha is depreciating, because we were expecting it anyway. The country still has not managed to diversify its sources of forex,” Chuka was quoted by Business News recently.
“If exporters get the right price for their dollars, they can invest more in exports. If we continue to worry about consumers like you and me and traders, then we are missing the point,” he added.
Already prices of commodities in local markets are going up and cash-strapped Malawi should brace for more torrid times as fuel prices are expected to follow suit.Follow and Subscribe Nyasa TV :