Reserve Bank of Malawi introduces forex auctions

Reserve Bank of Malawi RBM has introduced periodic foreign exchange auctions to discover, determine and maintain a market clearing price for Kwacha against the dollar and other major currencies

Speaking in an interview with Radio Islam, RBM spokesperson, Ralph Tseka, says, through the forex auctions, which will be held once every month, individual commercial banks will be submitting the price at which the kwacha should be bought or sold and the average price adopted by monetary authorities.

According to Tseka, RBM will no longer take the administrative responsibility of devaluing the kwacha adding that the depreciation or appreciation of the local currency will solely be determined by market forces of demand and supply.

Tseka says, the official rate will be at USD50, 000 and in multiples of 10,000 thereafter.