Malawi’s foreign exchange reserves have been significantly diminished, leaving the country with less than a month’s worth of funds, according to the Reserve Bank of Malawi (RBM), the central bank.
This revelation was confirmed by RBM spokesperson Ralph Tseka in an interview with local media Thursday.
Tseka acknowledged that the government’s expenditure of 50 million U.S. dollars per month on fuel has contributed to the depletion of the country’s fuel reserves. As a consequence, the foreign exchange reserves held by the government are currently inadequate to sustain the country even for a single month.
Economic expert Betchani Tchereni, in an interview with Xinhua, emphasized the urgent need for government intervention.
Tchereni suggested several measures, including the possible devaluation of the kwacha, the local currency, a reduction in official visits by government officials, and the exploration of alternative exportable crops.
“It is worth noting that our foreign reserves are in an unhealthy state. To alleviate this situation, we must seek long-term solutions that can provide sustainable assistance. We have relied on tobacco as a major source of foreign currency for a considerable period of time. It is high time we explore other options,” Tchereni suggested.
Presently, Malawi heavily depends on tobacco for foreign exchange earnings and the 2023 tobacco marketing season is currently underway. Enditem
