Apr 27, 2018 Last Updated 7:34 AM, Apr 26, 2018


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RBM Maintains Policy Rate

The Reserve Bank of Malawi (RBM) has resolved to maintain the policy rate at eighteen percent.

This is the rate that is used by the central bank to implement or signal its monetary policy stance.

The monetary policy committee met last month to make a decision on the matter, following a similar meeting held in June this year.

The June meeting recommended a slash in the base rate from 22 percent to 18 percent, thereby pushing commercial banks to reduce their interest rates.

RBM Governor Dalitso Kabambe, who is also Chairman of the monetary policy committee, said the decision to maintain the policy rate will help, consolidate economic gains and help maintain the single digit inflation rate.

According to NSO, the current inflation rate indicates a decline of 0.9 percent from the month of July, 2017.

The urban and rural rates stand at 8.9 percent and 9.8 percent respectively. Overall, food inflation stands at 6.2 percent from 7.4 percent in July 2017 while non-food inflation stands at 12.2 percent from 12.7 percent in July 2017.

This year, Malawi produced more than 30 percent surplus in maize owing to good climatic conditions after two successive years of low output due to drought and floods.

NSO figures released show that August inflation rate has eased by 0.9 percentage points from July’s 10.2 percent.

During the same period last year, inflation was at 22.8 percent, and this shows that prices of goods and services have increased at a much more reduced rate.

The World Bank has not released the $80 Million support which it approved for the Malawi Government, the Reserve Bank of Malawi confirms.

The Breton Wood organisation approved the amount as budgetary support to Malawi almost two years after direct budgetary support was suspended.

During the presentation of the 2017/2018 National Budget, the Finance Minister Goodall Gondwe hinted that the funds would go towards the settlement of government arrears.

Almost two months into the new budget, there have been questions on whether the Government has started making payments for the various arrears it has with the private sector and various sectors in the civil service.

Commenting on the monetary status of the country, the Reserve Bank Governor, Dalitso Kabambe, indicates that they have not started stocking the National Forex Reserves with the World Bank funds.

The World Bank is an international financial institution that provides loans to countries of the world for capital programmes.

It comprises two institutions: the International Bank for Reconstruction and Development (IBRD), and the International Development Association (IDA). The World Bank is a component of the World Bank Group. 

The World Bank's stated official goal is the reduction of poverty.

However, according to its Articles of Agreement, all its decisions must be guided by a commitment to the promotion of foreign investment and international trade and to the facilitation of capital investment. 

A Director at the Reserve Bank of Malawi has disclosed that the RBM still does not have full control over medical aid and insurance, pending completion of a regulatory framework on the matter.

There had been queries on the Registrar of Financial Institutions’ mandate to regulate medical insurance in the country, owing to disputes that arose about two years ago, between medical aid providers and hospitals.

There was a case, which saw disagreements over a medical aid institution’s failure to remit claim bills to administering health facilities.

The development led to the suspension of attendance to patients on medical insurance cover from the concerned Medical aid providers.

The Reserve Bank said then, that they could not intervene on such matters, as their mandate was limited.

This was due to a lack of a regulatory framework.

Speaking to Capital FM, the RBM’s Director Responsible for Pensions and Insurance Supervision Chimwemwe Kachingwe reveals that they have finalised drafting a Bill on the same.

Representatives of the Reserve Bank Of Malawi (RBM) have revealed that the country is losing about $980 million through illegal transactions.

In the local currency, this is over MK6 billion.

The bank made the announcement during the launch of a tip-offs anonymous program aimed at detecting fraud.

Speaking to Capital FM, RBM Governor Dalitso Kabambe stressed that the country will lose its potential for development if these transactions are left unchecked.

He expressed concern on the massive corruption scandal popularly known as the Cash Gate Scandal pushed Malawi backward in terms of development and it is only norw that it is beginning to recover from all the money it lost through the scandal

“Malawi is failing to development at a good pace like its neighbouring country’s because of illegal transactions”, Kabambe added.

The Governor went on further to say that as RBM they will do all they can to ensure that  a repetition of the Cashgate scandal or any other pilferage of government resources never happens as the cheques that were used in the latter were those of the reserve bank.

Malawi has for years been affected by corruption and commentators have continued to stress on the need for investigations into such matters to be quickly finalised so that wrongdoers are brought to book in order to deter would be offenders.

Just last week, the Anti Corruption Bureau disclosed that it had finalised investigations in district councils across the country and expressed concern on the findings as government resources are being embezzled by unscrupulous Malawians.

President Peter Mutharika has appointed a new governor for the Reserve Bank of Malawi after Charles Chuka’s term of office has come to an end.

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