The Reserve Bank of Malawi (RBM) says the declining global oil prices due to the coronavirus (Covid-19) pandemic offers little hope to economic variables in the country.

RBM spokesperson Mbane Ngwira said this in an interview on Tuesday in the context of the global oil price fall to around $20 a barrel that forecasting and policy analysis system takes into account a lot of factors into consideration.

He said reading too much into the development to anchor an inflation drop would be misleading.

“If raw materials cannot be imported into Malawi, this will impact negatively on domestic prices of manufactured products

“Yes, oil price is one of the determinants but it is not the only one that we take into account.” Said Ngwira.

On Monday, the price of oil fell to $22.58 (about K16 709.20) a barrel, its lowest level since November 2002, a development analysts expect would continue going forward and benefit oil importing countries such as Malawi.

On the other hand, when making its inflation forecasts, the central bank used the worst case scenario with oil prices pegged at $65 (about K48 100) to $75 (K55 500) a barrel.

In March, Malawi Energy Regulatory Authority (Mera) chief executive officer Collins Magalasi said the prevailing global developments surrounding the oil industry could benefit local consumers from declining oil prices, but argued that fuel pricing is not only dependent on the cost of purchasing the commodity.