Kwacha starts to strengthen

16 March 2016

We're keen to flag to members that the Malawi Kwacha has strengthened almost 10% in the last month: from MK1073:£1 on 16 February to 974MK:£1 16 March.

We're keen to flag to members that the Malawi Kwacha has strengthened almost 10% in the last month: from MK1073:£1 on 16 February to 974MK:£1 16 March. This is potentially encouraging news for the Malawian economy - we all hope this will help bring down inflation and ease the financial challenges so many Malawians face.

While good news for Malawi, the strengthening Kwacha might complicate some projects which operate in GBP budgets. We recommend keeping a close eye on the exchange rate in the coming weeks and months, and adjusting budgets and plans accordingly. We will continue to update members of major shifts in the bulletin.

It is quite common to see the Kwacha strengthen March-August, as the tobacco auctions bring forex into the country. How much the kwacha strengthens, and for how long, will in part be determined by the quality, yield and price of the tobacco harvest.

The strengthening kwacha is not good news for all in Malawi. Many cash-crop farmers are worried that they will get less for their produce, having bought farm inputs at higher rates last year.

Speaking at the end of February in the Mid-Year Budget Review Statement, Minister of Finance Goodall Gondwe, said he felt an equilibrium had been reached and the kwacha would stabilise.

XE.com is a useful website for tracking the value of the kwacha. Click here for a one year summary

As the exchange rate shifts, you might find variance between the rates stated on websites like xe.com and what is available locally. Always good to check with local banks in Malawi like the National Bank and Standard Bank

Trade Economics is a useful site for tracking official inflation rates

The Centre for Social Concern regularly updates a Basic Needs Basket (BNB), tracking the cost of essentials across Malawi, in both rural and urban areas. This is useful data to get a sense of the cost of living. Click here for downloads.

Kwacha