The central bank has ordered Auction Holdings Limited to begin a mandatory sale of 30 percent of it’s foreign exchange proceeds, generated from tobacco auction floors to the Reserve Bank of Malawi as the country continues to face forex shortages.
Governor Dr Wilson Banda
In a letter signed by the central bank’s governor, Wilson Banda, dated 24th March, the decision has been arrived at due to market developments hugely contributed by the global pandemic Covid 19, a thing that compelled the regulator to re-introduce an export proceeds surrender requirement as part of a solution.
Meanwhile, the central bank has been putting various measures in place in an effort to mitigate the country’s worsening forex situation including gold purchases.
The country’s import cover continues to take a downward trend with latest at 6 weeks against the recommended requirement of 3 months.
However, RBM showed optimism that the situation will change, citing the contributing pressures are mostly short lived.
