Central bank, the Reserve Bank of Malawi (RBM) has maintained a policy which banks use for interest rates, the policy rate at 12 percent.
RBM Governor Wilson Banda in a statement issued on Thursday after a two-day meeting of the Monetary Policy Committee (MPC) said the decision was deemed necessary though inflation pressures are mounting.
RBM Governor Dr Wilson Banda
He says the sources are considered transitory and likely to dissipate after the lean period.
The governor said the MPC also maintained Liquidity Reserve Requirement (LRR) ratio on domestic and foreign currency denominated deposits at 3.75 percent; and the Lombard Rate at 20 basis points above the policy rate.
The Reserve Bank sees a tough 2022 and has revised the year’s inflation forecast, expecting double digits at 10.4 percent from the earlier projection of 8.9 percent, owing to external factors and Covid 19 related adversities.
The economy grew by 3.9 percent in 2021 and higher growth of 4.1 percent is expected this year, driven by mining and construction investments, according to the central bank.
Exports declined in the 2021’s last quarter to US$260.3 million from US$338.4 million in the 3rd quarter while imports grew to US$870.6 million from US$822.4 million.
