Malawi’s foreign exchange reserves rose to $616.3 million in June 2026, equivalent to 2.5 months of imports, but economists say the improvement remains insufficient to ease forex shortages confronting businesses and other users.
The Reserve Bank of Malawi’s (RBM) June 2026 Monthly Economic Review shows total reserves increased from $596.5 million, equivalent to 2.4 months of imports, in May, and from $555.9 million, or 2.2 months of imports, in June 2025.
This represents a $60.4 million, or 10.9 percent, year-on-year increase, with RBM attributing the improvement to increases in both gross official and private-sector reserves.
Mzuzu University economics lecturer Christopher Mbukwa said the improvement was encouraging but remained below the three-month import-cover benchmark.
“Our threshold for forex reserves is three months cover, so at 2.5 months, we are still not there,” he said.
Mbukwa said difficulties accessing forex persisted despite the improvement, citing travellers unable to load foreign currency onto their cards and businesses waiting for forex to purchase goods abroad.
“So, the increase may be triggered by a temporary positive shock like the tobacco selling season,” he said.
Economist Edward Lemani similarly cautioned that it was “premature to conclude that the gains are structural”, arguing that Malawi’s narrow export base and heavy import dependence remained fundamental constraints.
He said sustainable reserve accumulation ultimately depended on stronger and more diversified exports, and argued that scarce forex should increasingly be channelled towards productive sectors capable of expanding the country’s export base.
Lemani warned that manufacturers and exporters could become uncompetitive when they obtain imported inputs at high effective exchange rates, including from the parallel market, while receiving less favourable rates for their export proceeds.
Scotland-based Malawian economist Velli Nyirongo said determining whether the improvement was sustainable required examining the sources of the accumulation.
“The quality of the accumulation matters more than the headline figure,” he said.
Nyirongo said export receipts, donor inflows, borrowing, import demand, seasonal agricultural earnings and central bank interventions should be examined before concluding that Malawi’s external position had structurally strengthened.
He further argued that higher reserves would only matter to businesses if they translated into greater liquidity in the forex market.
“For businesses to feel a meaningful improvement in forex availability, reserves must translate into greater market liquidity rather than simply stronger central-bank holdings,” Nyirongo said.
Mbukwa agreed, saying the practical test would be whether businesses could obtain forex quickly and whether the gap between official and parallel-market exchange rates narrowed.
“This cannot happen with forex controls only but by implementing robust supply-side programmes,” he said.
Mbukwa cited increased export revenues, mining, tourism and foreign direct investment as potential sources of additional foreign currency.
“We need to move from tobacco dependence as quickly as possible,” he said.
