Malawi Kwacha on the slide by 2.8% against US dollar

By Chisomo Phiri

The Malawi kwacha has marginally depreciated by 2.8 percent against the United States of America dollar following the foreign exchange auction the Reserve Bank of Malawi (RBM) conducted on Tuesday.

This means that the kwacha will now be trading at K1,126 against the dollar from K1,095.

In a letter to addressed to authorised dealer banks (ADBs) on Thursday, RBM Governor Wilson Banda said the forex auction was successful as all Authorised Dealer Banks (ADBs) participated.

Reserve Bank Governor Wilson Banda

“As per the bank’s communication from 12th January 2023 on foreign exchange auctions, these auctions will determine the market clearing price of the Malawi Kwacha against the United States dollar and other major currencies.

“In this regard, please be advised that effective tomorrow (September 1) the maximum selling price shall be K1,126.77 per dollar. Please be reminded that all foreign currencies should be priced according to the 2023 Guidelines for Foreign Exchange Trading Activities,” he said.

According to Banda,the modality of the forex auctions is that ADBs bid to sell foreign exchange to the central bank at prices or exchange rates freely determined by each participating bank.

He said the bids are now supposed to be for a minimum of $50 000 and in multiples of $10 000 thereafter.