Central bank establishes foreign exchange controls

The new controls are contained in a booklet called Exchange Control Manual which the Reserve Bank of Malawi (RBM) launched late last year.

The booklet containing exchange control supplementary instructions has been issued to Authorised Dealer banks (ADBs) as a guiding tool to standard components of the balance of payment.

Malawi's forex reserve has dropped to 1.53 months of import cover against an internationally accepted three months.

“Malawi's foreign exchange reserves are volatile due to the economy's over-reliance on primary commodity exports and in particular a few agriculture imports,” said RBM governor, Dr. Perks Ligoya at the launch.

He said the main challenge for Malawi as an emerging economy is the generation of sufficient foreign exchange reserves to meet the economy's growing import demand.

Taking his turn, president of the Bankers Association of Malawi (BAM) George Partridge said the booklet has now brought clarity on how they should handle forex transactions and hope that it will achieve its intended goals.