BLANTYRE--Malawi’s private sector has expressed confidence in the gradual but steady economic stabilization despite the current depreciation of kwacha.
The Malawi government in April this year bowed down to donors and devalued the local currency by 49 percent but the Kwacha has further slackened off by about 20 percent against the US dollar.
Commercial banks are recording as high as MK315 to $1 as a rate at which the local currency is being exchanged.
As of September, 28, 2012, the local currency depreciated by 1.07 per cent from MK295.80 to MK298.90. When the currency was devalued, one dollar was equivalent 250 kwacha.
The instability of the currency prompted some prominent economists to say government should introduce a management floatation system which would allow the government to intervene in critical circumstances through the Reserve Bank.
However, business experts feel the current economic regime is best placed to sail the country out of the current economic turbulence.
Speaking to MaraPost, Chief Executive Officer of the Malawi Confederation of Chambers of Commerce and Industries, Chancellor Kaferapanjira ,said the situation can only stabilize if the government doesn’t temper with the current exchange regime.
Kaferapanjira said this will best help the kwacha to settle, arguing that returning to a fixed exchange rate regime will jeopardize the recovery processes.
Neighboring Zambia, according to Kaferapanjira, had floated its currency until it reached where it belongs and business is better comparing to Malawi.
Meanwhile, the Reserve Bank of Malawi and commercial banks – the spoke through the Bankers Association of Malawi, have come out to say Malawi should stay the course.
---(c) The Maravi Post 2012. Reproduction without acknowledgement prohibited