Golden Forex Bureau, one of the Malawi’s foreign exchange bureaux, has predicted that in the next few weeks, the dollar will trade at as low as K350 following continued appreciation of the kwacha.
This week, some commercial banks such as Nedbank (Malawi) Limited sold the dollar at K386, Indebank at K384 as of Tuesday, probably the cheapest so far, from as high as K420 a few weeks ago in most commercial banks before the local unit stabilised and started appreciating.
Golden Forex Bureau director Charles Nsamala in an interview in Blantyre said yesterday it is clear that the continued stabilisation and appreciation of the kwacha is going to knock down the dollar to K350 in few weeks.
“Not long ago, people were buying the dollar at K420, but you may notice that buying has gone to as low as K386 and K384 being the lowest, while other commercial banks are buying it at K370 and selling at K390.
“I would not be surprised if it goes even below K350. It is our prayer if this can be sustained because it is beneficial to all Malawians,” he said.
Economic experts have attributed the stabilisation and appreciation of the kwacha to proceeds from tobacco sales in the country’s auction floors.
Tobacco, Malawi’s main foreign exchange earner, accounts for about 60 percent of the country’s total export earnings.
This year, government expects tobacco proceeds to hit $300 million up from $177 million earned in the 2012 season, when production was at its lowest level of 79 million kilogrammes in 18 years.
Reserve Bank of Malawi (RBM) Governor Charles Chuka said this week the easing of Malawi’s inflation rate and the kwacha appreciation, an increase in the value of the kwacha currency with respect to other foreign currencies, have come a month earlier than anticipated.
The RBM boss predicted a downward adjustment in interest rates in the course of the year.