Former Reserve Bank of Malawi (RBM) governor Dalitso Kabambe says the country should expect further depreciations of the kwacha as the K1 700 to a dollar exchange rate is still below the “market equilibrium”.
His comments follow the 44 percent devaluation of the local unit by RBM effective today.
“Furthermore, the devaluation is reckless as the previous one given that the fundamentals of the monetary policy remain helpless and the fiscal consolidation non-existent,” he said in a statement.
Kabambe said he sees no recovery from macroeconomic meltdown, adding that the devaluation “will only make the suffering experienced by Malawians worse” as prices of goods such as fuel, fertiliser and food will go up.
In a statement on Wednesday night, RBM Governor Wilson Banda said the 44 percent devaluation follows the imbalances as well as the mismatch in the exchange rate in cash and telegraphic transfer.
The kwacha was also devalued by 25 percent in May 2022 and since January this year, the local unit has depreciated by 13.1 percent.-NATION ONLINE
