Thursday, July 12, 2012

Bank Rate Adjustment: Reserve Bank of Malawi

The Monetary Policy Committee (MPC) met on 9 July 2012 to review recent economic developments and the stance of monetary policy.

The MPC observed that inflationary pressures are unlikely to abate soon as money and bank credit are growing at excessive rates. While the foreign exchange situation continues to improve, the MPC noted that uncertainties remain in the months ahead. In addition to these macroeconomic factors, the Committee took note of the increasing interbank market rates and the excessive recourse to the Reserve Bank of Malawi lending window.

In view of the above developments, the Committee resolved to adjust the Bank rate from 16 percent to 21.0 percent with immediate effect. Recognizing that at this level the Bank Rate is still negative in real terms given inflationary
expectations, the MPC undertook to review the situation at its next meeting.

Charles S R Chuka
10 July 2012

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