The Reserve Bank of Malawi held its policy rate at 24.0%, judging that declining inflation and subdued growth argued against an increase, while premature easing could reverse progress on disinflation. The rate had fallen from 26.0% in October 2025 to its current level by August 2026. The central bank raised the Lombard rate to 26.0% to strengthen liquidity management and monetary policy implementation. Headline inflation moderated to 20.1% in the third quarter of 2026, driven mainly by improved food availability, but remained significantly above the medium-term objective. The central bank revised its 2027 inflation forecast upward to 20.0%, signalling slower disinflation than previously anticipated, with El Niño weather conditions posing an upside risk. Economic growth is projected at 2.8% in 2026, supported by improved agricultural production, while private-sector credit growth slowed. Globally, Middle East tensions continued to generate uncertainty, and oil and fertiliser prices remained elevated for Malawi’s import bill despite quarterly declines. The central bank said it would remain vigilant and adjust its policy stance if emerging developments materially altered the inflation outlook.
Reserve Bank of Malawi Holds Policy Rate at 24.0%
The Reserve Bank of Malawi held its policy rate at 24.0% amid declining inflation and subdued growth, while raising the Lombard rate to 26.0% to strengthen liquidity management and monetary policy implementation. It revised its 2027 inflation forecast upward to 20.0% and cautioned that premature easing could reverse disinflation.