Reserve Bank of Malawi (RBM) Governor Dalisto Kabambe has said any decision to be taken regarding the monetary policy stance will be aimed at managing the risk and containing inflation.
Kabambe, who is also Monetary Policy Committee (MPC) chairperson, told Business News on Tuesday that the monetary authorities have been paying attention to fuel price movements, electricity tariff adjustments as well as maize prices on the market before taking any decision on adjusting a policy rate.
“Last year, we reduced the policy rate by 800 percent basis points because we saw that the macroeconomic environment necessitated us to do so. This year, we will still thrive to maintain our inflation in single digit so that it should be five percent by first quota of 2021,” he said.
The MPC had in September maintained the policy rate-the rate at which commercial banks borrow from the central bank-at 16 percent to counter inflationary risks.
The policy rate has been at 16 percent since it was last revised downwards by two percentage points in December 2017 largely due to decreasing inflation rate, which is currently at 9.5 percent as of September 2018, according to the National Statistical Office (NSO).