MALAWI: CENTRAL BANK MAKES DRASTIC FOREX INTERVENTION, AS IMF TAKES A STEP BACK

   Thu, 22 September 2022

Malawi’s central bank has taken the drastic step to ration foreign exchange reserves across all sectors to prioritise the payment of fuel imports to curb weeks-long shortages in northern and central regions. This intervention may allay further fuel shortages in the short term yet will exacerbate the balance of payments across the private and public sector. The IMF has raised concerns over debt sustainability and postponed talks on a new bailout, which raises the risk of an accidental default in the medium term, particularly as long as demand for cash crop exports remains depressed.

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