Malawi’s central bank issued a notice to authorized dealer banks that it is devaluing the local kwacha currency’s exchange rate to the dollar by about 44 percent from Thursday.
The statement showed the kwacha’s exchange rate would be adjusted to 1,700 kwachas per dollar from a selling rate of about 1,180 kwachas to the dollar.
It is the second time the southern African country has significantly devalued its currency. Devaluation in May 2022 aimed to prop up dwindling foreign currency reserves pressured by rising commodity prices and declining revenue from tobacco exports.
The latest notice to banks said the exchange rate adjustment was needed because there were still supply-demand imbalances in the currency market and arbitrage opportunities had resurfaced.
The central bank reported that spot checks on several market participants indicated their ability to settle import bills at the newly adjusted exchange rate.
The announcement by Reserve Bank of Malawi (RBM) also comes hours after President Lazarus Chakwera left the country for the Saudi-Arab-African Economic Conference in Riyadh.
