Bingu tells Parliament Malawi Kwacha will not be devalued
President Bingu wa Mutharika has shot down demands by International Monitory Fund (IMF) and other donors to devaluate the local currency, arguing doing that will only worsen poor people’s lives.
Mutharika while opening the budget review session of Parliament in Lilongwe, this morning vehemently argues that it was improper for IMF and other donor partners to demand further devaluation of Malawi Kwacha, describing the demands as unethical.
“It is surprising for IMF to demand developing countries like Malawi to devaluate their currency while developing country are not demanded to do. Even developing countries do not devaluate their currency anyhow, and whey they want to do so they do by their own strategy not advice from IMF.
“There is a need by IMF and other western donor countries to go to rural areas and demonstrate to the poor mass how the devaluation will benefit them. They need to explain to them how prices of commodities will be affected by this devaluation,” Mutharika said.
IMF insists Malawi Kwacha must be devalued by about 45 percent to between MK230 and MK250 to the US dollar if the bedridden economy is to be resuscitated,.
The IMF observes that the current rate MK165 is an “overvalue” of the local currency and not in tandem with the current trends on the ground. Currently, the kwacha is changing at MK230 to about MK255 on the parallel market.
In his speech, Mutharika further asked IMF and other donors to allow the country resolve its economic and political problems through its own strategies not by dictation.
“Devaluation for Kwacha will only hurt poor people in rural areas hard. I am here to protect the poor people I sworn to protect, therefore, the donors and other economic commentators should stop making recommendations that will worsen the livelihood of rural and urban areas,” he added.
He said IMF and World bank theories are not always right.
“They objected to the introduction of free ARVs but here we are saving lots of lives. They also objected to the farm input subsidy program but it has brought food security so why not allow me try our own policies,” Mutharika said.
Currently, Parliamentarians are meeting in Lilongwe for a budget review with calls from local economic commentators and opposition parties asking government to abolish the zero-deficit budget on grounds that it has failed the country.
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