← Back to briefs
Economy

Update: RBM Prepares for Middle East Market Shocks as Economists Push for Kwacha Unification

Tuesday, March 31, 2026
Photo: Nation Online

Update: The Reserve Bank of Malawi (RBM) says it is prepared to act against potential inflation and exchange rate pressures stemming from the Middle East crisis, according to Nation Online. Following a recent United Nations policy brief warning that rising global oil and freight costs could reverse recent inflation gains, RBM spokesperson Boston Maliketi Banda noted that the import-dependent economy remains highly vulnerable. Current foreign exchange reserves stand at just 2.1 months of import cover, which is below the recommended 3.9 months.

Update: Economists continue to push for the unification of the kwacha's exchange rates, Nation Online reports. A new policy note co-authored by the International Food Policy Research Institute and the National Planning Commission describes the current dual system as untenable. The report estimates that aligning the official rate of K1,750 to the US dollar with the informal market rate of roughly K4,400 would raise short-term consumer prices by only about five percent, as most market prices already reflect the parallel rate.

Update: In an ongoing effort to ease foreign exchange shortages, the RBM is urging small and medium enterprises to adopt the Comesa Digital Payment and Settlement System for cross-border trade. RBM Deputy Governor for Operations Kisu Simwaka stated that the platform allows traders to use local currencies, which cuts transaction costs and reduces reliance on foreign currency, according to Nation Online.

On the international trade front, the Observatory of Economic Complexity reported a decline in Malawi's exports to France. Trade data shows that Malawian exports to the European nation fell by 33.5 percent to 2.08 million euros in the final quarter of 2025, primarily driven by a drop in tobacco shipments. Conversely, imports from France increased by 56.6 percent to 775,000 euros during the same period.

On the Malawi Stock Exchange, trading closed on Tuesday with a total market capitalisation of K31.4 trillion. Market data showed a 310 percent improvement in daily turnover compared to Monday, with FDH Bank and Telekom Networks Malawi recording the highest volumes of traded shares, according to financial data tracker Kwayisi.

Sources

Malawian Apps

Switch between platforms