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Malawi devalues by 50%
Malawi ends currency peg to dollar
Malawi has dropped its currency peg to the US dollar, causing the kwacha to devalue by about 50 per cent as the southern African nation’s new president seeks to boost the flagging economy and mend relations with donors.
The central bank said Monday’s decision, combined with the liberalisation of the foreign exchange market, should lead to the country reaching an agreement with the International Monetary Fund and “unlocking donor flows in the next few months”.
The kwacha was on Monday selling at more than 250 to the dollar compared with the pegged rate of 165.
The move is one of a number of sweeping changes introduced by Joyce Banda since she took over the presidency following the death of her predecessor, Bingu wa Mutharika, at the beginning of April.