Malawi devalues Kwacha currency by 10 %
By Charles Kufa, Nyasa Times
Reserve Bank of Malawi has devalued the kwacha currency by about 10 percent against the U.S. dollar to 165, it has been reported.
According to a Reuters report, unnamed bank source said on Monday that Kwacha has been devalued, citing a directive, although the new rate is still well short of the currency’s value on the black market.
The news comes at a time when economic experts have been saying Malawi economy was in trouble and that foreign reserves were at dangerously low levels.
Economists have been arguing that strong kwacha has been hurting the economy by making Malawi exports more expensive for foreign customers and also creating shortage of forex
The report said the kwacha has been pegged at 150 to the dollar since devaluation from 138.5 at the end of 2009 but is worth around 185 on the black market due to a chronic dollar shortage partly caused by a drying-up of donor funding.
President Bingu wa Mutharika has been against the currency devaluation.
Economists have been arguing that strong kwacha has been hurting the economy by making Malawi exports more expensive for foreign customers and also creating shortage of forex.
The kwacha has been facing pressure following western donors withdraw of the budgetary support and poor tobacco sales.
Malawi last devalued its currency in 2009 from MK142 to a dollar to the current MK151.80 to a dollar.
