MWK down 7% against GBP in November

As the local economy’s lean period continues, the local currency (MWK) has certainly failed against other currencies –losing 7 percent to the British pound (GBP) in the month of November.
According to reserve bank website, the kwacha has depreciated against all major currencies in the month of November compared to the previous month of October.
For instance, the currency weakened by 5% to an average of MWK417.82 for 1 U$ Dollar while the British Pound depreciated by 7% to an average of MWK682.85.
However, the selling price to Dollar has already approached MWK445 in other Forex bureaus, which is only MWK 5 shy of the record MWK450 exchange rate it reached last year.
But the Reserve Bank has assured the nation that it will try to manage the situation with a view of controlling the kwacha from further depreciation, and to curb extreme Forex shortages.
Currently, the central bank has managed to maintain the official Forex reserves at 410 million USD an equivalent of 2.18 months import cover now when the local economy is deep in the lean period.
Commenting on the situation, former finance minister and economist Friday Jumbe said the situation is not surprising as the country’s economy can perform properly without the budgetary support.
Jumbe said the Forex levels will continue dwindling until Malawi starts exporting Tobacco sometime around April 2014.
He has however expressed concern over government’s lack of seriousness in resolving these problems.
“Government seems not ready to listen to advice and it is looking set to do everything that can only enable it winning the forth coming elections.
All that it focuses at the meantime is to find means and ways of remaining in government and this will worsen the economic situation in the country.”
Malawi’s economy is undergoing lean period where Forex supply is limited and the recent budgetary support freeze has brought more pressure on the fiscal side of planning.