{"id":3236,"date":"2011-07-05T13:41:16","date_gmt":"2011-07-05T13:41:16","guid":{"rendered":"http:\/\/www.faceofmalawi.com\/?p=3236"},"modified":"2011-07-05T13:41:16","modified_gmt":"2011-07-05T13:41:16","slug":"president-mutharika-tussles-with-economists-over-devaluation-of-the-malawi-kwacha","status":"publish","type":"post","link":"https:\/\/new.faceofmalawi.com\/index.php\/2011\/07\/05\/president-mutharika-tussles-with-economists-over-devaluation-of-the-malawi-kwacha\/","title":{"rendered":"President Mutharika tussles with economists over devaluation of the Malawi Kwacha"},"content":{"rendered":"\n
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WA MUTHARIKA: Destroyer of democrcay<\/p><\/div>\n

by:\u00a0Lameck Masina<\/p><\/div>\n

Blantyre – <\/strong>Malawi economists and International Monitory Fund (IMF) officials are pressuring Malawi president to devalue the local currency\u00a0Malawi Kwacha<\/em> (MK) so that it moves in line with market forces, but Mutharika is refusing to bulge.\u00a0Currently Malawi kwacha is officially trading at MK151.80 to US$1 while on the parallel market is going at MK190 to a dollar.\u00a0Economists say this has brought problems in the country\u2019s which is currently facing acute shortage of forex with people accused of holding the foreign currencies in anticipation to make a kill out it once the kwacha has been devalued.\u00a0The forex shortage had resulted into the recurrent fuel crisis that has hit Malawi since September last year as importers have been unable to purchase the commodity from outside countries. \u00a0Recently the government and the IMF failed to successfully complete a second review of the Extended Credit Facility (ECF) programme due to the Malawi\u2019s reluctance to liberalize the foreign exchange regime.<\/p>\n

The development threatens future budgetary support as the country\u2019s key donors said they would use a positive review from the IMF as a yard stick for the release their aid.\u00a0Economist have warned that this will also have a direct impact on the country\u2019s economy because, they say, although government has introduced a zero-deficit budget, it will still need donors and development partners funding for the implementation of some developmental projects.\u00a0Officials of the Reserve Bank of Malawi (RBM) the country\u2019s central bank which is legally mandated to control and implement the country\u2019s monetary policies have been reluctant to give their official stand on the devaluation call.\u00a0RBM spokesperson Ralph Tseka told a local radio station, Capital FM last week that the authorities was not in a position to comment anything \u2018on the ongoing debate\u2019 but the \u00a0\u2018decision will be made public soon\u2019<\/p>\n

However president Mutharika an economist by professional said in his state of nation address last week that come rain or sunshine he will never devalue the local currency.\u00a0\u201cDevaluating the Kwacha will result into a lot of problem to the ordinary Malawian because this will result in rise in prices of all goods and services\u201d Mutharika said.\u00a0Mutharika asked IMF officials to come up with a solution to what would happen after devaluation of the Kwacha. \u201cUnless IMF tell me how to address the problem I will not accept devaluing the Kwacha.\u201d\u00a0He also said should Malawi devalue its currency these will only foreigners who he alleged are holding forex to release it once the Kwacha has been devalued.\u00a0But IMF resident representative Ruby Randall said concerns raised by Malawi government over the consequences of devaluation can be addressed.\u00a0\u201cWe have been saying that IMF programs would accommodate a decision by the Malawi authorities to increase fuel and kerosene subsidies to those most in need on temporary and limited basis\u201d, she said.<\/p>\n

She also said that could also avoid the so called consequences of the devaluation if it improved on the farm input program to the needy Malawians so that they should continue having bumper harvests.\u00a0Commenting on the issue a columnist to the Malawi News, a weekly newspaper Steven Nhane compared the effects of devaluation on the poor Malawians to the effects of curative drug on the patients.\u00a0He said medical prescriptions are always bitter but the beauty of it is that its bitterness does not take long.\u00a0\u201cThat is what devaluation of the Kwacha it expected to do. You swallow the bitter pill, to cure the ailment, once and for all\u201d, he said.\u00a0A local economist Charles Chanthunya has warned that \u2018poor\u2019 economic policies which Malawi is implemented would likely aggravate the current economic crisis.\u00a0He said there is a strong need to even float the Kwacha arguing that just devaluating or fix it would solve the problem.Malawi last devalued its currency in 2009 from MK142 to a dollar to the current MK151.80 to a dollar.<\/p>\n

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by:\u00a0Lameck Masina Blantyre – Malawi economists and International Monitory Fund (IMF) officials are pressuring Malawi president to devalue the local […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[274],"tags":[135,277,906,807,907],"class_list":["post-3236","post","type-post","status-publish","format-standard","hentry","category-dpp-3","tag-ngwazi-bingu-wa-mutharika","tag-economics-2","tag-economist","tag-kwacha","tag-trading"],"_links":{"self":[{"href":"https:\/\/new.faceofmalawi.com\/index.php\/wp-json\/wp\/v2\/posts\/3236","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/new.faceofmalawi.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/new.faceofmalawi.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/new.faceofmalawi.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/new.faceofmalawi.com\/index.php\/wp-json\/wp\/v2\/comments?post=3236"}],"version-history":[{"count":0,"href":"https:\/\/new.faceofmalawi.com\/index.php\/wp-json\/wp\/v2\/posts\/3236\/revisions"}],"wp:attachment":[{"href":"https:\/\/new.faceofmalawi.com\/index.php\/wp-json\/wp\/v2\/media?parent=3236"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/new.faceofmalawi.com\/index.php\/wp-json\/wp\/v2\/categories?post=3236"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/new.faceofmalawi.com\/index.php\/wp-json\/wp\/v2\/tags?post=3236"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}