Malawi Kwacha go down on value by 10 %, inflation drops
Malawi currency the Kwacha has continued to weaken against some major foreign currencies such as the US dollar from K350 to K360.
So far the Malawi Kwacha’s has lost value by 10 percent points.
Executive Director of the Malawi Economic Justice Network Dalitso Kubalasa has since attributed the development to the closure of the tobacco selling season and importation of farming inputs in programs like the farm input subsidy program (FIPS).
While Chikavu Nyirenda, one of the market analysts, said there was need to increase export as a permanent solution to the weak currency.
Meanwhile, on the positive note of the health of the country’s economy, National Statistics Office (NSO) has announced that inflation has dropped 1.9 percentage points to 23.3 percent in August from 25.2 percent in July.
A general decline in the prices of non-food items on the market to 28.9 percent in August from 30.7 percent in July could explain the continued improvement in the rate of inflation in the country, which still remains the highest in the southern Africa region.
Reserve bank of Malawi governor Charles Chuka recently forecasted that inflation would continue to fall, citing RBM projections which he said showed that the December figure would drop to around 16 and 18 percent.
Malawi economy went on a free fall following the devaluation and subsequent floatation of the chakwa in May 2012 which saw a sharp rise of cost of living, soaring inflation rates- reaching 36 percent at its peak in December, 2012.
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