The country’s Kwacha continues sliding against major currencies, with the latest as of Monday, September 7, 2015 was traded at MK568, MK868 and MK42 to United States Dollar, UK Pound Sterling and South African Rand respectively as quoted by National Bank of Malawi (NBM).
The steep fall in the value of the local unit against international currencies at the time the sales of the green gold tobacco are towards closure with the total of US$317 million fetched as of September 2, 2015, records sourced at Tobacco Control Commission (TCC).
The Maravi Post visit on Monday, September 7, 2015 to some foreign exchange bureaus in the capital Lilongwe revealed that the Kwacha continued sliding down to the extent of trading between MK610 and MK615.
The local currency depreciation has led customers failing to buy forex from banks as speculations are rife that dealer banks are hoarding the local unit in a bid to suppress supply and stimulate falling of the Kwacha for profit making.
As of Wednesday, September 2, 2015, the Reserve Bank of Malawi official data showed that foreign reserves stood at US$682.89 million for 3.27 months of imports cover.
Speaking in an exclusive interview with The Maravi Post on Tuesday, September 8, Mathias Kafunda Center For Social Concern (CFSC)’s Economic Governance and Justice Programme officer predicted tough time a head as prices of essential commodities will continue skyrocketing.
Kafunda attributed the Kwacha’s depreciation to the Malawi government move of selling debt to COMESA’s Preferential Trade Area (PTA) Bank in December, 2014 in order to increase the dollar base as the result the country was paying back the forex obtained from tobacco sale proceeds.
“It’s very unfortunate that the currency is sliding while tobacco proceeds are fetching highly. The problems lay on how such reserves are managed. We suspect that government isn’t honest enough to the public on how tobacco proceeds are managed.
“This has led to speculation that, the nation has started paying back debt gotten from PTA Bank end of last year (December, 2014) through the revenues collected from tobacco proceeds. The condition we are now could have been avoided if government listened to such move that would
hurt us hard.
“Nevertheless, government must come clearly to the people on the current economic turmoil and control the parallel market (BlackMarket) for forex which has been relaxed for some time now, otherwise the citizens will still feel the pitch of such economic huddles”, predicts Kafunda.
The depreciation of the Kwacha is hurting importers, students studying with international examination bodies hard as they use more Kwachas to get foreign currencies than planned.
