Africa-Press – Malawi. The local unit, the Kwacha, lost value by an average 8.64 percent within a year to August 2022 against the United States Dollar, the Pound, the Euro and the South African Rand.
According to figures released by the Reserve Bank of Malawi, the local unit recorded a middle rate of K1,035.42 against the dollar at the end of August, representing a 26.2 percent fall when compared to the K820.21 middle rate recorded in August last year.
Against the British Pound, the local unit tumbled by 3.7 percent recorded at K1240.77 from K1196.67 in August last year while against the Euro the Kwacha depreciated by 2.06 percent to K1066.19 from K1044.60 last year.
The Kwacha fell by 2.6 percent against the Rand to K62.48 in August 2022 from K60.90 during the same month last year. In May this year, the Reserve Bank of Malawi devalued the Kwacha by 25 percent.
Money market expert Murry Siyasiya said the cumulative fall reflects prevailing mismatches between forex demand and supply, and is not expected to be fixed anytime soon.
“The only thing that could help the Kwacha gain value are [increased] exports. If we were to increase our exports it means we would have earned more foreign exchange, therefore the Kwacha would have appreciated.
“We use a flexible exchange rate which is automatic; when you export more the value of the currency gains. We know that we are entering the lean season where our exports will decline and we should expect the Kwacha to continue losing weight,” Siyasiya said.
Malawi University of Business and Applied Sciences-based economist Betchani Tchereni said the Kwacha performance is not surprising, saying the outlook remains murky.
“The demand for foreign exchange will continue rising and another devaluation may be expected,” Tchereni said.
Addressing private sector players at the opening of the Investment Summit in Lilongwe last week, President Lazarus Chakwera admitted that the country does not have foreign exchange.
He assured the citizens, however, that the government has put strategies to source foreign exchange to stabilise the economy and help in the purchase of essential commodities such as fuel.
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