Reserve Bank of Malawi has inadequate foreign exchange reserves

The Reserve Bank of Malawi (RBM) has admitted that the country is currently possessing inadequate foreign exchange reserves as compared to the past two years.

Speaking in an interview with Radio Islam, RBM Spokesperson Onelie Nkuna says the  foreign exchange reserve have been lower due to the covid 19 which resulted in lower export earnings, reduced remittances from the diasporas and lower foreign investments for both portfolio and foreign direct investment.

Nkuna said the demand for foreign exchange supply towards the end of last year was among others due to the demand for import for agricultural materials.

“The bank is committed to maintaining the exchange rate flexibility to absorb external shocks,” Nkuna

In its 2021 outlook, Malawi Confederation of Chambers of Commerce And Industry MCCCI says business environment in 2021 would be challenging especially in the first half.

A statement on the assessment of business environment in 2020 signed by MCCCI president James Chimwaza and Chief Executive Officer, Chancellor Kaferapanjira, says this year will be challenging due to the devastation of second wave of covid-19

Chimwaza and Kaferapanjira say the duration and extent of the devastation pause real risk because the expected response from government is uncertain.

“Joint efforts are needed to contain further spread of the virus through stringent public health measures,” MCCCI

MCCCI calls for provision of targeted monetary and fiscal incentives to ascertain core economic activities of manufacturing, small and medium enterprises as well as hospitality sectors.