The country looks set to maintain the country’s inflation rate at single digit as economy heads in positive direction, the Reserve Bank of Malawi (RBM) has said.
Malawi’s headline inflation is now at 7.7 percent, thus according to information the National Statistical Office (NSO) released last month.
According to NSO, the headline inflation for November, 2017 went one step down from October’s 8.3 percent compared to the headline inflation of 20.1 percent for the same period last year (October 2016).
The continued fall in inflation is largely driven by wide food availability, resulting in prices remaining subdued. Currently, the country’s staple food, maize, is trading at an average price of K4,500 per 50 kilogramme bag.
And RBM Governor, Dalitso Kabambe revealed to the local media the plan to also maintain the import cover above three months, which is a rule of thumb, and increasing diaspora remittances from $38 million (K28 billion) to $200 million (K147 billion).
“As a central bank, we have set for ourselves ambitious targets which are tough but achievable. If we do not experience any other shocks in the agriculture sector or increase of oil prices on the global market, we will achieve them,” said Kabambe during the launch of the bank’s 2018 Strategic Plan in Lilongwe.
“To show our seriousness I have signed commitments with all directors who will be responsible to ensure that these targets are met,” added Kabambe.
The 2018 Strategic Plan is, among other things, aimed at helping RBM to eliminate transfer pricing and illegal externalization of foreign exchange in partnership with Malawi Revenue Authority (MRA), the Malawi Police Service, Immigration Department and other agencies.
With regards to deepening the financial market, the central bank wants to increase the number of listed companies on the Malawi Stock Exchange (MSE) by five from the current 13, implement the automated trading system and upgrade the central security depository.
RBM also wants to increase the usage of electronic payments from 13 percent to 25 percent through the full implementation of the National Taskforce on Electronic Payments (Ntep) roadmap and increase allocation of pension funds in infrastructure projects from seven percent to 17 percent.
“Through the same targets, we also want to attract at least three prospective bank investors to establish banking services, including the establishment of the development bank in partnership with the Ministry of Finance, Economic Planning and Development,” he said.
Kabambe also wants to see RBM ensuring a sound, robust and resilient financial system which will see RBM conclude preparation and processing of two financial sector laws and 29 directives.
In its Financial Stability Report 2017, RBM gave banks a clean bill of health, saying the banking sector remained stable with adequate capital position, liquidity and it was profitable, despite that asset quality deteriorated.Follow and Subscribe Nyasa TV :