Kwacha gains ground further
The local currency, the kwacha continues to gain more ground against major convertibles, appreciating against all major international currencies in the month of February 2015, Reserve Bank of Malawi (RBM) statistics show.
The currency, as of yesterday, strengthened further to trade as high as K425 against the United States dollar in some authorised dealer banks in Lilongwe from a peak of K520 it was sold in December last year.
RBM figures show that the kwacha appreciated by 3.3 percent against the dollar to close the month at K439.42, gained 0.7 percent against the British pound, 2.6 percent against the South African rand and 4.7 percent against the euro.
Meanwhile, tobacco growers have raised eyebrows over the continued gain in the value of the kwacha, fearing that such a situation would affect their total earnings in kwacha terms once the market opens.
President of the Central Region Tobacco Growers Association (CRTGA) Ernest Chadzunda yesterday fumed at RBM, advising them to deliberately stop the steep gain in the value of the kwacha before the tobacco market casts its doors open.
Said Chadzunda: “We have been complaining to authorities year in and out on the strange fluctuation of the currency once the market opens. We would love if government comes in to stop this massive appreciation if we are to make some profits this year.”
On his part, Tobacco Association of Malawi (Tama) chief executive officer Graham Kunimba also asked Treasury and RBM to deliberately control the volatility of the currency which he said is discouraging farmers to produce more tobacco.
RBM spokesperson Mbane Ngwira yesterday attributed the continued appreciation of the kwacha against other currencies to the injection of more foreign currency in the market, among other factors.
Gross Official Foreign Reserves which fall directly under the control of RBM stood at $669.18 million as at March 4, 2015, representing 3.5 months of import cover.
But he said a stable currency is in the best interest of everyone and not tobacco growers alone.
Meanwhile, Nico Asset Managers Limited, a Blantyre-based investment management and advisory firm has projected that the exchange rate is expected to continue appreciating as we approach the opening of tobacco market.
