The Economics Association of Malawi- ECAMA said the movements of the local currency indicate that authorities are still having a task to make it stabilize.
The economic think tank, said this weeks after the local currency was reported to have appreciated against some major currencies like USD and Pound from around k450 to k430 and k745 to k735 respectively.
Meanwhile, the central Bank has since attributed the currency gain to its initiatives in carrying out economic reforms that were meant to cushion the budgetary support freeze by the donors.
However, speaking in an interview, ECAMA’s President Edward Chilima though acknowledged Reserve bank’s efforts, said the ideal situation is stability of the currency.
Chilima said that the local currency may start depreciating again in Months period if demand for dollars will again be in the rise.
“The currency was just coming from a huge depreciation where it was 450 to Dollar, and therefore it appreciated possibly because less people were willing to buy the expensive dollar.
“This is a season phenomenon, meaning that when the demand of the less valued dollar increases, it is likely that the green gold will also require more kwacha’s to chase.”
Commenting on Reserve Bank’s boast that the said appreciation was triggered by its initiatives in economic reforms it carried out to cushion the suspension of budgetary support, Chilima though acknowledged its impact, has urged the regulator to make sure it directs the local currency to stability.
Said Chilima; “It has been demonstrated that RBM’s reforms are workable as they have managed to reduce the rate at which the local currency moves either upwards or downwards against other currencies.
“However, the fact that it is still moving, speaks loud that the bank still have the task of making it stabilize.
“What we want is stability, if they will manage it to settle and reach its equilibrium, then we will say the economy has stabilized.”
ECAMA has been a darling to Joyce Banda administration- offering adversary services on economic issues.
