The Reserve Bank of Malawi (RBM) has reinstated the government’s directive requiring all transactions at the Tobacco Auction Floors to be conducted in foreign currency, reversing an earlier decision that had allowed use of the local currency.
In a statement signed by RBM Deputy Governor, Dr. Kisu Simwaka, the central bank says the policy aims to boost foreign exchange inflows, promote transparency, and create a level playing field for all players in the tobacco industry.
The Bank has since instructed the Tobacco Commission to facilitate the implementation of the policy, which will come into effect in the next tobacco marketing season.
Meanwhile, RBM has urged tobacco merchants to declare all foreign exchange brought into the country for operational purposes.
Economists Edward Leman and Hannock Ngwata say the move will strengthen the country’s foreign exchange reserves and enhance transparency.
However, Ngwata cautions that the decision may frustrate some companies that previously bought tobacco in local currency, particularly those lacking adequate forex resources.
