LILONGWE-(MaraviPost)-The country’s central bank says there is no enough gold to realize much needed foreign exchange .
Reserve Bank of Malawi (RBM) Governor Wilson Banda told journalists on Thursday, September 29, 2022 in the ongoing 2022 Monetary Policy Conference currently underway in Lilongwe that the bank has not bought enough Gold to make an impact on the Foreign exchange situation.
This comes barely a week after the Central Bank Governor told Parliament that the Bank has bought 130 kilograms of Gold which is worth US$89 million.
Banda observes that though RBM is buying Gold but is not in large quantities to stabilize forex shortage as anticipated.
“What we’re currently buying is small scale alluvial Gold but we are considering increasing so that we start buying in large quantities. Yes, we have made some progress but we can do more,” said Banda.
Banda however said Malawi has not achieved the economy recovery due to uncertainties such as COVID-19, Russia Ukraine War, debt crises, volatile commodity prices and climate change.
The governor added further that country’s appetite for imports has also exerted pressure on the country’s foreign exchange reserves.
According to Banda, currently, Malawi is importing US$3 Billion worth of goods and exporting US$1 Billion goods representing a US$2 trade gap.
“While the RBM remains committed in ensuring price and financial stability through its implementation of monetary policy, the general public and the private sector are expected to aide in achieving of these objectives by among other things, enhancing particularly foreign exchange generation which has remained very weak for a long time. Let us also embrace our domestic products where we can to ensure that we preserve our foreign exchange,” adds governor.
Gracing the conference, Labour Minister Vera Kamtukule expressed need for Malawi to come up with hardcore, tangible, practical and unconventional solutions to keep the economy afloat.
Kamtukule observes that conference gives an opportunity to interrogate the traditional monetary policy approaches and also have conversations that may in the long run challenge the way central bank operates moving forward.
“In the monetary sector, the recent devaluation to re-align the external value of the Malawi Kwacha has fueled inflation.
“The Reserve Bank’s attempt to deal with inflation through contractionary monetary policies has raised the reference interest rates severely constraining access to finance for investment. It is important to deliberate on these factors,” said Kamtukule.
Under the theme, “Monetary policy in the 2020’s runs runs from September 29 to 30, 2022 at Bingu International Convention Centre (BICC) in the capital Lilongwe.