The Reserve Bank of Malawi’s Monetary Policy Committee held the policy rate at 24.0% in its third decision of 2026, judging the stance appropriate to sustain disinflation without unnecessarily weighing on economic activity, although inflation remains well above its medium-term objective and risks are elevated. The policy rate was 26.0% in October 2025, marking a net decline of 200 basis points by August 2026. The committee retained the Liquidity Reserve Requirement at 12.0% for local-currency deposits and 3.75% for foreign-currency deposits, while keeping the Lombard Rate 0.2 percentage points above the policy rate. Headline inflation is projected at 22.0% in 2026, still above the 5.0% objective, while economic growth is forecast at 2.8%, supported by improved agricultural production but constrained by weaker non-agricultural sectors. Broad money growth moderated significantly and banking-system liquidity tightened, indicating that previous policy measures are transmitting through financial conditions. Geopolitical tensions, supply-chain disruptions and elevated international oil and fertilizer prices pose upside risks through higher import and production costs, while possible El Niño conditions threaten domestic food availability. The committee said it would adjust the stance if developments materially alter the inflation outlook, with its next decision due on 29 October 2026.

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