In the midst of the Tobacco season the Malawi Kwacha has seen its biggest depreciation since last year .The kwacha is trading at as high as k530 to dollar in some of the foreign exchange bureaus.
The fall of the local currency has come after months of promising stability and continuing promises from Finance Minister Gondwe that it would continue to appreciate.
The last time the local unit sharply lost its value against the dollar was in November last year when it hit K520 in some authorised dealer banks (ADBs).
But this time, the depreciation of the kwacha comes at the height of the tobacco sales which have already raked in $204.38 million ($102.2 billion) in 13 weeks of sales, up from $183.45 million during the same period last year.
Economists said this largely reflects sustained uncertainty about whether donor aid will resume. The Peter Mutharika Government has tried very hard to encourage this. However everywhere you turn corruption is rampant in Malawi.
Many donors had suspended support in the wake of last year’s “Cashgate” scandal, in which more than $30 million was looted from government coffers, the British auditing firm Baker Tilly concluded in a report released last month.
Economic experts have projected that the fall of the kwacha will result into the rising price of goods and service. And this will put pressure of workers asking for higher wages leading to more dreaded demonstrations.
