BLANTYRE--Malawi government’s alleged proposal for a policy change on floatation of the currency is a sign of panic, local economic expert, Friday Jumbe, has said.
Speaking to The Maravi Post, Jumbe said the proposal shows how worrisome is the situation to authorities as the currency keep on weakening to US Dollar against inadequate donor funding in floor.
However while saying the proposal is justifiable, Jumbe, who once served as finance minister in the Bakili Muluzi administration, said fixing the kwacha isn't an ideal option, thereby suggesting a management floatation in which the regulator is sometimes involved in rate determination.
On the other hand, Jumbe observed that if the trend will not be controlled, the currency will keep on depreciating up to a point where investors will not feel secured.
Jumbe, who also at one point advised ggovernment to assure Malawians on the short term prospects of local currency’s strength to prevent speculations from investors, has since hailed Joyce Banda’s Administration for economic recovery plan initiative.
According to him, there is a need for the government to also consider reducing interest rates which are still high following the devaluation of the kwacha that facilitated the rise in inflation.
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