Africa-Press – Malawi. The Reserve Bank of Malawi (RBM) has said it has observed with concern the increase of illegal foreign currency transactions taking place across the country.
In a statement issued on Wednesday, RBM Governor Macdonald Mafuta Mwale said illegal forex dealings were a violation of the Foreign Exchange Act, No. 18 of 2025.
According to Mafuta Mwale, the Act is clear that any person, other than an authorised dealer, who intends to buy or sell foreign currency within Malawi, shall buy or sell the foreign currency through an authorised dealer.
“It is an offence for a person who is not an authorised dealer to buy, sell, borrow, lend, exchange any foreign currency with a person other than the bank or an authorised dealer; or [to] facilitate the transfer of funds to, or from, a foreign country, unless the person has the permission from the Bank,” he said.
The RBM chief added that it is also an offence to abet the illegal buying, selling, borrowing or lending of foreign currency; or to assist in the unauthorised transfer of funds to or from a foreign country.
Mounting demand for forex, coupled with subdued supply, has in recent years led to the blossoming of the forex parallel market.
In its June 4, 2025 statement, International Monetary Fund (IMF) staff noted that a unified and market clearing exchange rate is critical to reducing imbalances and supporting the authorities’ growth objectives.
According to the IMF, the current regime, with a large and volatile spread between the parallel and official rate, creates distortions, impedes exports, subsidises some imports, and encourages informality and tax avoidance.
“Foreign direct investments and official aid flows are discouraged, and domestic revenues reduced. Eliminating these imbalances requires unifying the official and parallel exchange rates, at a level reflecting fundamentals and discounting speculative factors, and stabilising the foreign exchange market.
“Consistency among the de facto exchange rate regime, the monetary policy framework and fiscal policy are needed to ensure sustainable growth,” the statement reads.
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