Contrary to the Reserve Bank of Malawi’s prediction that the local currency’s exchange rate will be stable, Nico Asset Managers says that the Malawi Kwacha will depreciate against other foreign currencies this year.

Nico Asset Managers has justified its pessimism by stating that the current account deficits, weak foreign direct investment inflows and the continued low levels of forex reserves deficits are factors that will make the kwacha continue to depreciate.

On the other hand, the RBM says its confidence in the kwacha’s stability has been attributed to adequate foreign exchange reserves, as figures on the recent Monetary Policy Committee meeting report, show that gross official reserves rose to $846.6 million representing 4.05 months of imports in December 2019 from $656.0 million representing 3.14 months of imports in September 2019.