By Chisomo Phiri
The Reserve Bank of Malawi (RBM ) has kept its policy rate at 26% and Lombard rate at 20 basis points above the policy rate, despite a slight increase in inflation during the first quarter.
The average inflation rate rose to 29.9% from 29.2% in the previous quarter.
According to the Monetary Policy Committee, annual average inflation is projected to decline to 27% this year from 32.2% last year.
The central bank expects foreign reserves to improve in the second quarter due to agricultural produce sales.
However, the bank has revised its growth projection for 2025 to 3.2%, down from 4%, citing dry spells that affected parts of the country.
Policy rate is the interest rate that commercial banks pay to borrow money directly from the central bank while the Lombard rate is the interest rate charged by central banks when extending short-term loans to commercial banks.
