The recent devaluation and the removal of control of forex have helped to improve the availability of forex in Malawi, Finance Minister Ken Lipenga said Friday.
“Although the country’s forex reserves are not up to the required levels, there are indications that the recent donor inflow will bring in the much needed hard currency,” said Lipenga.
Malawi has signed loan agreements with several international donors with inflow from the World Bank totaling to US$700 million.
“The recent funds we have received from donors such as the World Bank has helped improve our import cover to at least one month or so”, said Dr. Lipenga.
“This was necessitated by the devaluation of the Kwacha by 49.9 percent this year, and donors are now coming in because the conditions are now favorable”.
He said currently there are reserves of about one month which he said although not enough but is a sign of light at the end of the tunnel.
But Lipenga has since cautioned that the country should not solely depend on donor inflow but look at long term solutions of generating forex through other means such as increased production and exporting.
Britain, Malawi’s largest bilateral donor, has also advised Lilongwe to starting moving from aid to trade dependence