Reserve Bank of Malawi (RBM) governor perks Ligoya yesterday could not say if the latest kwacha devaluation is enough to bring the international monetary fund (IMF) supported extended credit facility (ECF) back on track.
The fund suspended the (ECF) in June this year after government failed to devaluate the kwacha-one of the key IMFâ€™S demands in the programme.The ECF if is also key to unlocking donor funds that have since been withheld. Ligoya told a news conference in Lilongwe that he is not sure whether what has happened is acceptable or not but added that the thing has been done so that Malawians should judge if the procedure is quiet ok or not.
The IMF has been pressing the government to devaluate the kwacha but President Bingu WA Mutharika led resistance against the remove, saying it would inflammatory and hurt the poor more.
Meanwhile the IMF resident representative in the country Ruby Randall said the fund is expected to discuss first with the authorities before it tries to comment on these actions.
Apparently the kwacha is going at k152 to the dollar since devaluation from k138.5 in 2009, but on the black market itâ€™s going at k185 due to chronic dollar shortage caused by a donor freeze and low tobacco earnings.
The governor however warned dealers on the black market to stop their business because it is illegal and hurting the economy.
He also said that government is yet to draft a bill which comprised of stiffer penalties for offenders and will keep empower the bank to curb illegal trading in foreign exchange.
By :Joshua Morishu (FaceofMalawi)
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