Reserve Bank of Malawi (RBM) says it expects inflation at the end of the year to still come down to 9.3 percent from 11.5 percent attained at the end of 2019.
RBM Governor Dalitso Kabambe said in a Monetary Policy Report last week the continued exchange rate stability, together with the decline in global oil prices will assist to contain non-food inflation while food inflation is projected to continue declining in the near term, owing to improved maize harvest.
He said: “However, uncertainties surrounding the evolution of the Covid-19 pandemic is the key upward risk. This notwithstanding, RBM remains committed to the 5±2 percent inflation objective in the medium-term.
“The stability of the kwacha will be anchored by adequate foreign exchange reserves, supported by impending opening of the agriculture marketing season.”
The kwacha traded at K741.01 per US dollar as at end March 2020 and is projected to remain broadly stable in the year.
Inflation, on the other hand, has been declining as a result
of falling maize prices with February inflation recorded at 11 percent.
Maize, as part of the food component, impacts the country’s economy given that it constitutes 45.2 percent of the Consumer Price Index (CPI), which is an aggregate basket of goods and services for computing inflation