K1 Trillion Reserve Bank transactions was debt restructuring – RBM

Experts at the country’s central bank, the Reserve Bank of Malawi (RBM), say that the bank legitimately wired the K1 trillion in a single day in June last year to various local commercial banks as part of debt restructuring process.

Media reports published over the weekend indicated the June 26, 2020, a day before President Lazarus Chakwera was declared winner of the June 23 fresh presidential election, was questionable and “one of those under investigation at the central bank.”

Former RBM Governor Dalitso Kabambe

The article also linked the transactions to allegations of impropriety among RBM senior management that led to the arrest of former Governor, Dalitso Kabambe, Deputy Governor Henry Mathanga and Senior Dealer Financial Marketing Operations Leah Ndonga who are presently on bail.

While Minister of Finance, Felix Mlusu, has simply said they are “investigating the matter,” Economics Association of Malawi (ECAMA) executive director, Frank Chikuta, entirely declined to comment on the matter, according to the article.

But a high ranking official at RBM, privy to the information surrounding the transactions, who sought anonymity for fear of employment reprisals said the media was misleading.

“The transactions were actually a pure debt restructuring process from short to medium term loan (5 to 6 years) to make it cheaper for Government in terms of interest payments.

“The holder of this debt is AfreximBank, an international investor in the country’s debt market,” RBM official said.

The RBM official said at the particular time in June 2020, the Malawi Government debt was to the tune of K4.8 trillion, and it was part of this debt that was being restructured from short term, 90 days Treasury Bills to become medium term, that is, 5 to 6 years.

‘Deposits Into Commercial Banks’

According to RBM official, AfreximBank wanted to invest in the local debt market and they transact everything in US dollars.

“For this to happen they [AfreximBank] need local commercial banks through which they can exercise their marketing right. In this case they don’t trade with individuals but rather their account, which is in foreign currency. They bring their dollars into their account, which helps the country to have a stable forex reserve,” the official explained.

Nyasa Times is digging deeper into the story following the release of the Deloitte  forensic report, to ascertain whether there were indeed illegal transactions at the Reserve Bank under the watch of former Governor Dr Dalitso Kabambe.

Dr Kabambe aspires to become leader of the ruling Democratic Progressive Party (DPP) at the next convention succeeding former President Prof Peter Mutharika subsequently becoming torch bearer in the 2025 presidential elections.

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Malawi walero
Malawi walero
1 year ago

Shame on Tonse alliance
Next you will pay Kabambe and others

Kasina
Kasina
1 year ago

Kabambe will surely school the incompetent

Wanagwa
Wanagwa
1 year ago

Let RBM officials issue a formal statement not this anonymous coward individual who can be a cadet supporting DPP illegal transactions. Let the bank comment on this

Last edited 1 year ago by Wanagwa
Anzelu ndi Anzelu
Anzelu ndi Anzelu
1 year ago

Does this mean that Kabambe and others are not guilty of what they are being accused of? Next thing they will be suing government for wrongful arrest and political victimization.

Ndafera Nkhande
Ndafera Nkhande
1 year ago

Koma vizungu va ma economists ndizovuta kunvetsa munthu wamba. Debt restructuring ngati olufuna kuongola nyumb yoti ya khota kapena mntanda wachita gavu.Yaye tele ife tampenya nawo. Wakwata kwa mphezi saopa kunganipa.

Chiphwisi
Chiphwisi
1 year ago

Those of us who know financial transactions know that this whole fiasco is stupid aimed at tarnishing the clean Kabambe who is posing a threat to the king of thieves.

laws
laws
1 year ago

ife tili ku ma stand kuwonelera

Hap
Hap
1 year ago

APM wayiwerenga nkhaniyi? Bwana tikudikira mulakhulepo. Timasulereni biggy. Mpakana 1 trillion tsiku limodzi Ku kuyitulusa? Shame on dpp. Thats why MEC Chief elections officer anangothawako kupanga resign he so it coming. Muwafufuze amenewo. Nawoso bwana APM kuli ziii akumakamba nkhani zosamveka pa press conference while nkhani za makobili ngati izi osakambapo. Zomverana chisoni a malawi tinasiya. Mmene munabwezera 148 mita ya CITY OF BLANTYRE ija bwezani iyiso if ku ma stand tikudikilira. Diphiphi bomaaa kkkk

Last edited 1 year ago by Hap
Nya mulembe
Nya mulembe
1 year ago

Kabambe uja ndi mwana wa nzeru kuyambila kalekale

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