By Jones Gadama
In a move aimed at stimulating economic growth, the Reserve Bank of Malawi (RBM) has announced significant changes to the country’s foreign exchange regulations.
The central bank has removed the 30 percent forex surrender requirement for exporters, a decision that is expected to increase export earnings and boost the country’s foreign exchange reserves.
RBM Governor, Mac Donald Mafuta Mwale, announced the measures in Lilongwe, citing the need to promote economic growth and stability.
“The removal of the 30 percent surrender requirement will enable exporters to retain more of their foreign exchange earnings, which will in turn increase their competitiveness in the global market,” Mwale explained.
In addition to removing the surrender requirement for exporters, the RBM has also reduced the amount to be surrendered by non-exporting recipients to 25 percent of their total receipts.
This move is expected to increase the amount of foreign exchange available for use in the economy.
Non-governmental organizations (NGOs), which are required to surrender 70 percent of their forex received, will also benefit from the changes.
The central bank has announced that the surrender will be effective at the time of use of the forex, rather than at the point of receipt as was previously the case.
The RBM has also announced changes to the forex trading licenses for banks and bureaux.
The licenses will expire at the end of June, and institutions will be required to apply for new licenses that will be renewed annually.
This move is aimed at increasing transparency and accountability in the forex market.
In a bid to combat forex-related crimes, the RBM has introduced a tip-off anonymous platform.
Informants whose information leads to the conviction of forex-related crimes will be rewarded with cash prizes, the amounts of which will be announced later.
The changes to the forex regulations are expected to have a positive impact on Malawi’s economy, which has been struggling in recent years.
The removal of the surrender requirement for exporters, in particular, is expected to increase export earnings and boost the country’s foreign exchange reserves.
The RBM’s decision to relax the forex regulations has been welcomed by exporters and economists, who say it will increase competitiveness and stimulate economic growth.
However, some have expressed concerns about the potential risks associated with the changes, including the potential for abuse and the impact on the country’s foreign exchange reserves.
As the changes take effect, it remains to be seen how they will impact Malawi’s economy.
One thing is certain, however: the RBM’s decision to relax the forex regulations is a significant step towards promoting economic growth and stability in Malawi.
