Kwacha sinks lower: Malawians burdened as they welcome 2016

Malawians are on Thursday bidding farewell to 2015 on a bad note as the kwacha continues to tumble against the dollar and inflation is increasing becoming high pushing up the cost of living.

Malawi Kwacha sinks to new low

Malawi Kwacha sinks to new low

Poverty ... a Malawi hut

Poverty … a Malawi hut

Foreign exchange market indicates the kwacha is trading at K1 000 to the British pound and K668 to the dollar.

 The kwacha’s performance is pushing prices of commodities and services up causing discomfort to Malawians, among them students studying with foreign institutions and paying their fees in foreign currency too.

An investment management and advisory firm named Nico Asset Managers, said in its economic brief the kwacha would continue depreciating in the short term as the lean season continued.

The kwacha has been depreciating rapidly in the third and fourth quarter of 2015.

The firm said the lean season had led to high demand for the U.S. dollar and that the dollar had also been strengthening hence the recent fall of the kwacha.

The firm envisioned that in the medium and long term, the kwacha was expected to depreciate due to the significant current account deficit and weak foreign direct investment inflows despite tobacco exports and improved forex reserves.

At a news conference at Sanjika Palace in Blantyre, President Peter Mutharika promised the economy would be under control by this month of December.

However, in a recent radio interview, a renowned economist at Chancellor College Professor Ben Kalua said economic fundamentals show that the economy is far away from stabilisation.

He said government’s internal borrowing, and the high inflation rate is putting the economy off balance.

Kalua doubted if Malawi would meet conditions set by the International Monetary Fund if the country is to qualify for the IMF extended credit facility that would attract donors to come back to give Malawi the much needed 40 per cent budgetary support whose absence has crippled the public health sector among key areas.

Finance minister Goodall Gondwe has assured Malawians that all will be well in 2016 though stressing it will take time for the economy to fully recover.

He was upbeat IMF will lead donors back to Malawi to resume aid in the year beginning Friday.

On the political front, Malawians are also leaving the 2015 with nolstagia following political battles between the executive arm of government led by President Mutharika on one hand and former president Joyce Banda who is in self imposed exile.

Banda is accusing the Democratic Progressive Party led government of orchestrating her arrest through connecting her to the infamous cashgate.

She said the DPP is doing all the smear in order to divert people’s attention from the critical economic situation the country is facing.

However, DPP spokesperson Francis Kasaila says the party is not meddling in cashgate issues which he said are eing handled by the director of public prosecutions and the Anti Corruption Bureau.

He said the DPP cannot lose sleep of Banda whom he said is politically finished as evidenced by coming a distant third in the 2014 general election, which he said is very unusual for a sitting head of state

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bamusi
Guest

Mbuzi

Rodgerr Kazembe
Guest

That is the of leaders without vision

mbwiyache
Guest

SIGNS OF THE TIMES, NO ECONOMY IN THE WORLD IS 100% GOOD. ASK THE RUSSIANS, AMERICANS, BRITONS EVERYWHERE. PLEASE KEEP ON READING AND STUDYING WORLD’S MAJOR ECONOMIES THINGS ARE NOT WORKING AS EXPECTED. THANK GOD THAT MALAWI IS A PEACEFUL NATION, NO REBEL GROUPS,GANGSTERS. TOGETHER WE CAN GET RID OF POVERTY NOT THE PRESIDENT HIMSELF. OSAMANGODZUDZULA HEAD OF STATE AMALAWI TELL HIM NGATI NAYENSO NDI MUNTHU

munyenyembe
Guest

Even south Africa rand is failling is it Peter munthalika who us ruling here????

Balamanthu
Guest

Upon checking the National Bank website, I almost fell off my chair when i saw that the monthly rural inflation rate is surpassing that in urban areas.Zoona?Koma ikakwana nthawi yamavoti-kumawanamiza wanthu ndi ma MK50!

Balamanthu
Guest
Umbuli ndi chinthu chozunza.The comments made by number 31 make alot of sense.Economics is such a subject when you tell lies, the fundamentals prove you otherwise.Thats what is happening to our country.Bingus economics of fixed rate is stone age economics which put us all into alot of sheet and most of us have already forgotten. There are no signs that the Kwacha will stabilize?What will make it stable?Which economic fundamentals and in what setting?Imeneyi ifika MK1000 to the dollar before February 15,2016.I bet you.What do we export apart from fodya whose quality is mixed and ziboliboli?We dont control the Chinese… Read more »
mbodzole
Guest

my salary gets lower and lower every day while prices gets high and high

Frazer Gomani
Guest

We are now leaving in difficult moment as God is angry of gay marriages.Which leader we will have to stabilise kwacha ?.Its only Bingu and Malawi will cry for Bingu so long.

kambindingu "hard & low"
Guest
kambindingu "hard & low"

We are leaving in a failed state ruled by a bunch of myopic politicians without any vision for the development this country.

pluto
Guest

Owerengawe khala maso

wpDiscuz

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