The official rate of Malawi’s currency has been cut by a third as the impoverished southern African nation seeks to repair ties with the International Monetary Fund, the country’s central banker said Monday.
The move is just one in a series of steps President Joyce Banda’s government has taken that sharply distinguish her administration from that of her predecessor, who died in office last month.
“The devaluation of the kwacha and the liberalization of the foreign exchange market are expected to continue government’s efforts to reach … agreement with the IMF,” the central bank chief said at a press conference in Malawi’s capital, Lilongwe. “The currency adjustment is further expected to have the effect of reducing demand for imports of consumer goods in favor of domestically produced goods.”
After taking office following her predecessor’s death of a heart attack last month, Banda had pledged to repair a relationship the IMF had called “off track.” The late President Bingu wa Mutharika had rejected IMF advice to devalue the kwacha.
Chancellor Kaferapanjira, executive director of the Malawi Confederation of Chambers of Commerce and Industry, said businesses had expected a devaluation and had already factored it into their prices.