Cross boarder currency for Malawi,neighbours

Malawians will soon be sharing trade using direct currency from neighbouring countries. Finance minister Ken Kandodo announced the country will soon engage Zambia, Mozambique, and Tanzania in a currency repatriation programme.

Government argues there is no need for people trading around the borders with these countries nto to use their normal country currency.

"This will speed trade of goods and services along the borders as the agreement allow the four countries to accept each other’s currencies. The country's foreign exchange reserves will also be safeguarded,” he said.

The minister also revealed to parliament that in order to mitigate the impact of the global recession on the Malawi economy, the Reserve Bank of Malawi maintained the bank rate at 15.0 percent and issued repurchase “REPO” instruments to combat inflationary pressures arising from the movement in the exchange rate.

“Consequently, growth in money supply decelerated to 24.4 percent at the close of 2009 from 33.1 percent recorded in 2008. Growth in money supply declined further to 15.1 percent by March 2010. Consistent with the monetary policy objective of providing a conducive environment for economic growth, credit to the private sector increased by 39.5 percent in 2009,” he said.

The 2010 - 2011 Monetary policy, he added, will be geared towards containing monetary growth in order to ensure low and stable inflation rates, while providing room for sufficient credit growth to the private sector and supporting the build up of external reserves.