Value of Kwacha drops
11 September 2015
The Kwacha has dropped some 23% in the past two weeks, from MK705:£ at the start of the month to MK870:£.
The Kwacha has dropped some 23% in the past two weeks, from MK705:£ at the start of the month to MK870:£.
We have also seen an increase in inflation from c18% in March to over c22% today. Both of these present real challenges for the people of Malawi, and should be considered by all those managing budgets between the two currencies. We are keen to flag this up to members.
We usually see a seasonal shift with the kwacha weakening around this time as tobacco sales end but this is more drastic and sudden than we would usually expect. This is widely seen as the result of poor tobacco and coffee harvests resulting from floods earlier this year. Media analysis:
Bloomberg: Kwacha extends slide against dollar - Malawi currency is worlds worst performer
Nyasa Times: Malawi kwacha continues to weaken against dollar
Biz News: SAS future corruption weakened Malawi economy in freefall as floods hit
The SMP is in active dialogue with the Scottish Government and others, exploring ways projects can best mitigate the implications of this shift and avoid large underspends. We hope to have further advice in the coming weeks.
We encourage members to monitor the Kwacha closely while it remains volatile. We will continue to flag up major shifts and offer advice and support wherever we can.
