Minister of Finance Simplex Chithyola-Banda has backed the decision to devalue the Malawi Kwacha saying the Malawian currency was overvalued and this was affecting the country’s economy.
Minister responsible, Simplex Chithyola-Banda said this at Bingu International Convention Center (BICC) in Lilongwe following the recent 44% devaluation of the Malawian Kwacha.
He said Malawi Kwacha was not trading on its real market value and it was negatively affecting the economy of the country.
“The recent 44% devaluation of the Malawi Kwacha is a necessary step to take if Malawi economy is to be put back on the right track.
“The overvalued Kwacha was affecting local production of goods and services as people found it cheaper to import goods than buy locally produced ones hence killing local production,” said Chithyola-Banda.
The Minister also indicated that many investors were not interested to invest in the country because of the overvalued Kwacha.
The minister highlighted that without the devaluation, criminal and illegal black forex markets would have continued to flourish as there was collusion between the black market and some corrupt bankers.
Chithyola Banda said with the recent realignment, Malawi Government will fight illegal forex trading and the country is expected to enhance its productivity, trade and investment.