Kwacha gains slightly to Dollar – Reserve Bank of Malawi

Malawi Kwacha, which is trading at its lowest levels, has slightly firmed against three major foreign currencies, Reserve Bank of Malawi (RBM) report indicates.

The central bank indicated in its latest financial market development report, that the Kwacha currency has appreciated against the United States dollar, British pound and South Africa rand, but has marginally depreciated against the euro.

The local currency traded at around K557.85 against the dollar this weel, according to RBM, which is a gain from K570 to a greenback in the past weeks.

Foreign exchange rates in some authorised dealer banks (ADBs) also show that the kwacha is trading at around K560 to a dollar.

The central bank has not provided an explanation behind the gain in the value of the kwacha, but University of Malawi economics professor at Chancellor College, Ben Kaluwa, told a local paper that the slight appreciation to lower buying power among businesses.

He said since foreign exchange market is driven by demand and supply, the local currency might be appreciating not because the currency is doing fine on the supply side, but because people do not have the buying power.

“For instance, if business is poor, demand for imports will reduce. Right now, the demand for one of Malawi’s major imports, petroleum products, is falling and this can result in the kwacha appreciating as people are substituting expenditure,” Kalua is quoted as saying.