Forex reserves at 2.4 months cover—RBM

Forex reserves at 2.4 months cover—RBM

Foreign exchange reserves have picked up over the past three months, hitting $603 million (about K1 trillion), an equivalent of 2.4 months of import cover as of April 30, Reserve Bank of Malawi (RBM) data shows.

The forex reserves are, however, slightly lower than the $604 million (about K1 trillion) achieved during the same period last year, according to RBM figures.

The reserves have increased from $540 million (about K945 billion) or 2.16 months of import cover in February, and have increased at a time sales of tobacco, the country’s main foreign exchange earner, are in progress.

But RBM spokesperson Mark Lungu, in an interview on Monday, could not indicate whether the buildup in foreign exchange reserves can be attributed to tobacco sales.

He said: “We cannot tell for sure how much the tobacco sales have impacted on the forex situation.

“We are yet to make an assessment on that, but surely as the market progresses, we should be able to see some positive impact.”

Meanwhile, a Tobacco Commission sales update shows that as of week four, tobacco revenue stood at $81.3 million (about K142 billion), an 89.2 percent increase over the same period last year at $42.9 million (about K75 billion).

The update further shows an increase of 47.5 percent in volumes sold at 30.1 million kg with an average price of $2.70 (K4 272) compared to $2.11 (K3 694) per kg the same period last year.

On trade in general, the RBM’s Monthly Economic Review shows that as of March this year, the merchandise trade balance recorded a deficit of $194.4 million (about K430 billion), an increase from $128.5 million (about K225 billion) recorded during the same period last year.

On the international trade front, the RBM data indicates that the country imported goods worth $643.5 million (K1.1 trillion) in the first quarter of this year against exports valued at $135.8 million (K237 billion) during the same period last year.

This outturn represents a deficit of $507.4 million (K888 billion) in the first quarter,  jump from  $495.8 million (K868 billion) in the preceding quarter.

This is against a deficit of $598 million (about K1 trillion) recorded during the first quarter of 2023.

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