Malawian Kwacha Hits Decade Low as Foreign Reserves Decline
Malawi’s kwacha dropped to the lowest in almost a decade as the Southern African country’s foreign-exchange reserves dwindled further.
The kwacha retreated 1.7 percent to 370 a dollar at 5:18 p.m. in Lilongwe, the capital, according to data compiled by Bloomberg. It has fallen 9.5 percent this year and is at the weakest since June 22, 1993, when Bloomberg began compiling data on the currency.
“Liquidity in the foreign-exchange market is extremely limited, particularly offshore, with the supply of dollars very, very thin,” Yvette Babb, a strategist at Standard Bank Group Ltd. in London, said in an e-mailed reply to questions. “These dynamics continue to exert upward pressure on the currency.”
Malawi’s foreign-currency reserves have declined 18 percent to $192 million, or 1.01 months of import cover, since a year earlier, according to the Reserve Bank of Malawi.
President Joyce Banda devalued the kwacha by a third against the dollar a month after taking office in April to meet conditions set by the International Monetary Fund for a resumption of donor aid.
To contact the reporter on this story: Chris Kay in Abuja at email@example.com
To contact the editor responsible for this story: Vernon Wessels at firstname.lastname@example.org