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Bololo
Bololo
8 years ago

@Bokonomiks (5) just like banks are free to use local currency deposits to make loans and other payments, they also use foreign currency deposits for other things. You can observe commercial banks’ own foreign exchange reserves have been in negatives meaning they are using part of customers deposits for payments. That is normal banking as long as they observe exposure limits.

Malindima
Malindima
8 years ago

The history trend shows import cover strengthening from Q3 to Q4 every year with 2014 being exceptionally well. What I don’t understand( as a layman) is the measure adopted by RBM of keeping the reserves in kwacha than in Dollars to free the Dollar within the Financial system. What is the use of this strategy if it will fail to help cushion the kwacha when Federal Reserve raises its rates therefore forcing the import cover down to 2 months? Educate me here. Secondly in the prevailing circumstances where money laundering is on the rise where people are trading the foreign… Read more »

George Lihoma.
George Lihoma.
8 years ago

Keep it up Neville Mandimika where ever you are(I presume you aren’t in Xenoland)). Most of the columns to do with Economics we get from the social media aren’t understood by the majority including me a standard 3 drop out at Zomba Boys Primary,PO Box 267,Zomba. They are normally full of professional in house English which makes the whole story junk news. Yours is well written and understood. Hahahahahahahahaha!

Manase kanamazina
Manase kanamazina
8 years ago

Thats what we except the good governance…..keep it up

Sukati Jere
Sukati Jere
8 years ago

Pamene ena akumayamikira za mphamvu ya Kwacha ife amenenso takhala tikutsatiranso bwino ndalamayi mwaumbuli tawonapo chimodzi chomwe tinganene:ndalamayi imapatsidwa mphamvu nthawi yokhayo yomwe alimi akugitsa fodya.Mkuganiza kwathu kwaumbuliko ndikwakuti a RBM amapanga dala cholinga alimi alandire makwacha ochepa pa US$,chodabwitsa kwambiri anzathu omwe amwa ink kwambiriwa kwawo ndikuyamikira kuti chuma chagwira mnseu.Muwona pompano malonda a fodya akatha aibwenzeretsanso pamalo ake.Ife osaphunzirafe timvekere ndalama yagwa.Bwanji mitengo yazinthu siitsika ndalama ikapeza mphamvu? Izo ndiye ntchito za anthu ophunzira.

Bokonomiks
8 years ago

Observation of foreign currency LRR in local currency does not free up any foreign currency for payment of import bills. LRR is observed on customer deposits and are thus customer funds which banks cannot trade on/foreign payments. Lets be very clear on that, dont just take the central bank’s statement as the gospel truth; interogate the statements.

zotu
zotu
8 years ago

Jargon buster needed here. Couldn’t understand half of the article.

Mja Nkhuli
Mja Nkhuli
8 years ago

Good article please post more articles such as this that provide an insight in Malawian economy, since our Chancellor College economic commentators love to only talk politics and stupid things.

Zidura Ntengo Undigwere
Zidura Ntengo Undigwere
8 years ago

This kind of analytical piece on the economy should be a regular column on the site, or any other site in Malawi. It does answer some important questions I had, mainly about the reasons behind the extraordinary warrior stance by the Kwacha. Especially outside the tobacco season. And I have been observing the currency for many years.

johnkaitano
8 years ago

good leadership is judged by its fruits

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