In its Country Report for Malawi, the International Monetary Fund (IMF) has called for a review of the reference rate formula, arguing that it is less transparent and raises banks’ intermediation costs.

The statement reads in part, “IMF urges the Reserve Bank of Malawi to raise repurchase agreement rates in order to more effectively mop up liquidity and keep the interbank rate aligned with the policy rate,”

In response to the report, RBM spokesperson Mbane Ngwira told The Nation newspaper that policies are always reviewed for their effectiveness. On the other hand, the Bankers Association of Malawi (BAM) has argued that the new measure is working well and has given an opportunity to lenders to know the lending rate.