NEWS | Economy | The Forum
Malawi has no plans to devalue the kwacha, Finance Minister Joseph Mwanamvekha said on Friday, arguing that another currency adjustment would worsen economic hardship without addressing the country’s foreign exchange shortages.
Speaking at the launch of the Sixth Integrated Household Survey Report by the National Statistical Office, Mwanamvekha said the International Monetary Fund (IMF) shares the government’s view that devaluing the currency in the absence of adequate foreign exchange reserves would be counterproductive.
“We devalued our currency, but what happened?” he said. “Prices have gone up. Interest rates have gone up and our people have become poorer than they were before. Devaluation is not the only answer.”
His remarks come as Malawi continues discussions with the IMF on a possible Extended Credit Facility (ECF) arrangement aimed at supporting the country’s economic recovery and reform agenda.
In a statement issued at the end of a 10-day mission to Malawi, the IMF said its team held constructive discussions with government officials on the country’s economic outlook and policy priorities.
“The authorities reaffirmed their commitment to implementing sound and credible policies aimed at restoring and preserving macroeconomic stability and supporting inclusive and resilient growth. Discussions will continue on the package of policies and reforms that could be supported under an ECF arrangement,” the IMF said.
The IMF delegation, led by Justin Tyson, visited Lilongwe and Blantyre from June 8 to 18 to assess recent economic developments and begin discussions on reforms outlined in the National Economic Recovery Plan (NERP) that could be backed through an ECF programme.
The visit followed the government’s request for an ECF arrangement. During the mission, the IMF team met Finance Minister Joseph Mwanamvekha, Reserve Bank of Malawi Governor George Partridge, Secretary to the Treasury Cliff Chiunda and other senior government officials.
The delegation also consulted representatives of the private sector and Malawi’s development partners as part of its assessment.
An ECF programme would provide concessional financial support while helping anchor economic reforms designed to restore macroeconomic stability, strengthen public finances and promote sustainable, inclusive growth.
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