Africa-Press – Malawi. Malawi’s foreign exchange reserves were seen at $595.2 million in May 2025, providing only 2.4 months of import cover, which is below the internationally recommended threshold of three months.
This is according to Reserve Bank of Malawi (RBM) spokesperson Boston Maliketi Banda.
Furth, a Malawi Financial Market Update for the week ending June 6 2025, published by Bridgepath Capital Limited shows a concerning downward trend in total reserves, which stood at $610.18 million in May 2024.
The reserves hit a low of $516.9 million in November 2024 before recovering slightly to the current level, but remain insufficient to meet international standards for economic stability.
In an interview, Maliketi Banda acknowledged the challenge while highlighting positive developments from the ongoing tobacco marketing season.
He described the current reserve level as reflecting a positive trajectory despite falling short of the three- month import cover benchmark.
“Since the start of the 2025 tobacco marketing season, Malawi has seen positive developments in foreign exchange availability. As of May 2025, 72.7 million kilograms of tobacco were sold, generating $178.4 million in earnings.
“Currently Malawi’s total foreign exchange reserves stand at $595.2 million, providing 2.4 months of import cover. Although below the internationally recommended threshold of 3 months, this reflects a positive trajectory and underscores the effectiveness of ongoing measures to bolster forex availability,” Banda said.
He said the central bank acknowledges the importance of diversifying exports beyond tobacco.
In a separate interview, economist Velli Nyirongo warned of significant risks posed by the sustained low import cover.
He cited potential consequences that could undermine investor confidence and increase borrowing costs.
“A sustained import cover below three months exposes the economy to significant risks.“This situation undermines investor confidence and could lead to increased borrowing costs or further currency depreciation, as markets perceive a higher risk of balance of payments difficulties,” Nyirongo said.
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