The Reserve Bank of Malawi published a statement following the Government and the International Monetary Fund’s mutual decision to allow Malawi’s Extended Credit Facility program to lapse, reaffirming its commitment to prudent monetary and exchange rate policies and stating that no exchange rate devaluation is envisaged. It said a home-grown macroeconomic framework has been developed with the Ministry of Finance and Economic Affairs to guide the economy during the transition. The framework is built on fiscal discipline to align revenues with expenditures, monetary control to contain monetary expansion, and strategic foreign exchange management to stabilise the kwacha and rebuild international reserves, with implementation monitored by a selected group of institutions. To support exchange rate stability, the RBM will continue targeted interventions in the foreign exchange market, prioritising essential imports and working with the banking sector to ensure adequate liquidity and efficient foreign exchange allocation. The central bank is also collaborating with commercial banks and the private sector to expand financing and address structural bottlenecks in agriculture, tourism, mining and manufacturing. The RBM welcomed the World Bank’s approval on 15 May 2025 of a USD 350 million grant for the 358.5 megawatt Mpatamanga Hydropower Project and Government’s commitment to an IMF mission in May 2025 intended to lay the groundwork for future programs aligned with Malawi’s needs. It urged the public and market participants to refrain from speculative behaviour that could undermine price stability and said it stands ready to take further policy actions, including targeted support to strategic commodities and productive sectors.
Reserve Bank of Malawi2025-05-16
Reserve Bank of Malawi sets out domestic macroeconomic framework and FX market interventions as IMF Extended Credit Facility program lapses
The Reserve Bank of Malawi announced the lapse of Malawi's Extended Credit Facility program, emphasizing its commitment to prudent monetary and exchange rate policies without devaluation. A home-grown macroeconomic framework has been developed to guide the economy, focusing on fiscal discipline, monetary control, and strategic foreign exchange management. The RBM highlighted the World Bank's approval of a USD 350 million grant for the Mpatamanga Hydropower Project and urged against speculative behavior affecting price stability.