2 hours Ago By NyasaAuthor1
The Reserve Bank of Malawi (RBM) has decided to maintain its policy rate at 26%, a key decision that will impact various aspects of the economy. This move, announced by RBM Governor Dr. Macdonald Mafuta Mwale, is aimed at stabilizing inflation and controlling prices in the market.
In his announcement, Dr. Mafuta Mwale said, “We decided to maintain the policy rate at 26% largely because of what we are seeing in terms of the inflation outlook. Obviously, our monetary policy looks at the expected movements in the inflation rate and we have very good indications that in 2025, inflation will moderate to lower levels compared to 2024.
” For ordinary Malawians, this decision means that the cost of borrowing is likely to remain manageable. Since the central bank’s policy rate influences interest rates throughout the economy, the 26% rate suggests that interest rates may not rise significantly, which could make loans more affordable for businesses and individuals. This is particularly important for small businesses or Malawians who rely on loans for daily needs or investments.
The RBM’s decision comes amid an optimistic inflation outlook for 2025. According to the World Bank, global food prices—which were very high in 2024—are expected to fall by at least 4% in 2025. Dr.
Mafuta Mwale further explained, “We expect this move to stabilize inflation and prices on the market,” and this could bring much-needed relief to Malawians, especially in terms of food prices, which have been a significant concern for many households. The policy also comes as Malawi’s agricultural sector, which is vital for the country’s economy, begins to recover from erratic rainfall patterns earlier in the rainy season. With the rains stabilizing, the hope is that agricultural production will improve, helping to control inflation.
For Malawians, maintaining a steady policy rate could mean lower pressure on their pockets, especially when it comes to borrowing money and buying essential goods. It also signals that the central bank is taking steps to ensure a stable economic environment in 2025, which is crucial for the country’s growth and prosperity. Sharing is caring!.
