Banker says the Kwacha must not be fixed

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A player in the banking industry says that fixing the Malawi Kwacha is not a solution to the continuing depreciation of the local currency against the dollar.

The Malawi Kwacha is faring well on the market as it is hovering around K560 to the dollar which was previously at K580 to the United States dollar.

George Patrige

Patrige: Says currency should not be fixed.

As one way of maintaining it, the general public and economic commentators are insisting that the currency should be fixed.

However, Chief Executive Officer of National Bank of Malawi George Patrige says the remedy is that the Kwacha must find its true value.

“The only solution is that the Kwacha must find its true value, if it does not then it would encourage other people who sell the exchange rate,” said Patrige.

He further said that the current policy is discouraging imports and incentivizing exports and it is a natural remedy to sort out the situation.

“If we have to adhere to what the popular are saying to fix the Kwacha then we will be perpetrating the same problem we are trying to sort out,” he said.

In September this year government through the ministry of Finance said it had no plans to change its current policy on the exchange rate and start fixing the Kwacha in the wake of continued depreciation of the local currency.

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26 Comments

  1. Even if its fixed or when it has found its true value, the banks will still reap us off due to the main reason being that we are predominantly an agricultural countly (tobacco to be exact), and the uncertainty surrounding these exports, and unfavourable rainfall patterns, will always mean the banks have a reason to keep the interests high. Plus, we dont have much to offer on the international market to balance up the heavy import hunger we have here, so I don’t see any means we are going to see the Kwacha stabilising or attain “THE TRUE VALUE”.

    Don’t forget it has been well over 3 years since the floating exchange rate regime started, and the Kwacha has yet to register more than at least 3 months of some sort of “stability”.

  2. this is not true journalism..which economic commentators want the kwacha fixed?if this is not from the gvt,then it should be your ideas.patridge is very true…fixing the kwacha will make our exports lose competitiveness on international markets.tiwonjezela mabala

  3. Kungoyamba kugwilitsa ntchito dollar dziwani kuti we shall be under American ndipo 666 will take over as well as osatsutsa zomwe azungu adzanene mapeto ake kudzakhala nkhondo

    • its difficult to appreciate the fact that silence is golden for many malawians..i can comment on issues i’ve little understanding/issues i dont understand at all.surely the kwacha has to gain its true value.fixing it is nat an option.either we float it or manage it.two options

  4. Sibwino kuika ndemanga pa zinthu zomwe sitikuzimvetsa, kutukana ndi nkhani ili apayi sizikugwilizana, zinazi siyani okhawo akumva chingelezi alankhulepo. Umbuli mankhwala ake ndi school.

  5. Ngati zikuvutitsitsa bwanj kusingosintha ndikuyamba kugwiritsa ntchito Dollar yomweyo? Kuti akafuna kuigwetsa, ndekuti adzgetsa dollar yawoyo!!! Maganizo anga akutelo

    • maybe yes,but that has nothing to do with fixing the kwacha or not.patridge is very true,the kwacha has to gain its true value.fixing our currency will make our exports lose competitiveness on international markets.tiwonjezela mabala

    • Thanks for coming in with a very sincerly argument, to begin with your argument is very true as far as many books are conerned be it economics or finance management , but these theories have to be looked at critically. looking at our economy we are a predominantly an importing country, the total exports are averagely only 5% of total international trade. By fixing the curency your saving the 95% those are importers while by frexing it ur saving the 5% whichare the exporters like the tea industry, the tobbacco sales etc. Every decission has its effects but the guiding factor should be which decission work for the good of majority malawians. Bankers benefit directly at the unstable kwacha because the factor in inflation when determining the interests on loans knowing that kwacha keeps falling and falling.

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