Forex still in short supply weeks after $88m IMF injection
Dollars-still in short supply
The forex scarcity is set to continue as the government confirms that the 88 million US dollars from the International Monetary Fund (IMF) was depleted days after disbursement.
Lilongwe received the funds on 22 November under the International Monetary Fund’s Rapid Credit Facility to address urgent balance of payment needs.
However, the funds were about one third of the country’s monthly imports bill which hovers around 285 million US dollars.
The Reserve Bank of Malawi-RBM has disclosed that the forex was fully utilised through importation of drugs, fertilizer and fuel.
The fuel scarcity has now resurfaced, confirming the draining of the gross official reserves which were at 1.36 months import cover as of November 30.
Finance Minister Sosten Gwengwe declined to give more details, saying the RBM is better placed to explain the current situation.
“I will be speaking on behalf of RBM so if you can speak directly to RBM on issues of our forex reserves. what we are doing, what’s coming the bank will give you a much better picture, otherwise even what I report in parliament is prepared by RBM,” Gwengwe said.
In a separate interview, RBM spokesperson Ralph Tseka says the RCF funds helped the country in the past weeks but were not sufficient to meet the country’s needs.
“The money really assisted us in meeting some of the short term needs especially the importation of fuel, drugs we were able to meet with the funds from IMF.
“So yes the money assisted in meeting our short term needs but as you can see is that the money is far from our usual or market needs,” Tseka said.
Earlier, an economics analyst from the Malawi University of Business and Applied Sciences Betchani Tchereni said the funds were critical to solving the country’s short term balance of payment needs at a time of disbursement.
Internationally, countries are required to have forex reserves worth at least 3 months of import cover which is more than 850million dollars at Malawi’s case.
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