Twice in two days, the Monetary Policy Technical Committee has postponed scheduled announcement of Monetary Policy Committee (MPC) meeting decisions, heightening speculation about possible changes in economic indicators.
Officially, the Reserve Bank of Malawi (RBM) attributed the situation to the absence of the signature its Governor Wilson Banda, who chairs the MPC and is away in Eswatini on duty.
But economic analysts have cautioned that the uncertain situation could spark speculation in the market because results of the MPC offer guidance in terms of the direction of the economy.
The fourth MPC meeting of the RBM was held on Monday in Blantyre and earlier RBM director of public relations Mark Lungu announced in a statement that following the meeting, the central bank will hold Monetary Policy Technical meetings on Wednesday in Blantyre and today in Lilongwe.
On Wednesday the meeting was postponed to yesterday, but when delegates convened at Amaryllis Hotel in Blantyre, a representative of RBM said the monetary policy statement was not yet signed by Banda.
In an interview yesterday, Financial Market Dealers Association president Lesley Fatchi said such delays could heighten speculation, which is not good for the market.
“The key impact would be the speculation that the delay would incite as by tradition, the statement or decision is released immediately after the MPC meeting,” he said.
Capital Markets Association president John Kamanga said the MPC technical forum should communicate the decision to the public because the details are critical to the market.
Bankers Association of Malawi president Phillip Madinga said the authorities could perhaps have other parameters to guide the economy and the changing global context.
Madinga, who is also Standard Bank plc chief executive officer, said: “We have a new president in the United States of America. The US dollar has also gained and China has significantly weakened its currency in preparation for more drastic trade tariffs from the US.
“The Bank of England has dropped interest rates and the Federal Reserve Bank is expected to do so now.”
Former minister of Finance in the Democratic Progressive Party administration Joseph Mwananvekha said he neither expects the policy rate to be raised nor the currency to be devalued as doing so could worsen the current economic situation.
In a latest market intelligence report, RBM indicated that it will continue to maintain a tight monetary stance amid uncertainty of the stability of Middle East instability and the Russia Ukraine war despite the easing inflation pressure in the third quarter.
