RBM extends kwacha exchange

If you are still holding on to the old kwacha notes because you could not find time to exchange it at banks to get the new series of notes, the Reserve Bank of Malawi (RBM) has given you three more months to do just that or lose out completely.

The process of exchanging old kwacha notes with the new series came to an end on Wednesday this week, effectively stopping commercial banks from accepting and the public from using it as legal tender.

“However, to accommodate those who failed to exchange the old notes at commercial banks by closing date May 22 2013, RBM has set aside an additional period of three months from May 23 2013 to August 23 2013 for people to exchange the old notes, but only at RBM in Lilongwe, Blantyre and its Mzuzu sub chests,” Efford Goneka, director in the governor’s office, told the press yesterday.

But the old notes still cease to be legal tender; meaning no one will use it to buy anything or do business with it.

Goneka said the bank decided to extend the period because of calls from lawmakers and businesspersons who demanded for an extension.

He dismissed assertions that the decision could be inflationary, saying that no additional liquidity has been created because of the exchange.

Stoking inflation has been the central bank’s major worry in recent months, but last month, inflation has eased to 35.8 percent from 36.4 percent in March.

To address the concerns of people in very remote areas still keeping the old notes, Goneka said the central bank has made arrangements with the Malawi Postal Corporation to accept and exchange the old notes.

“For security reasons, proper identification of the persons exchanging the notes will be required,” the statement reads in part.

Apart from asking for identification, the bank will also ask questions and demand explanation from anyone wishing to exchange a lot of money to avoid dealing with laundered money and counterfeits.