BLANTYRE, May 8 (Reuters) – Malawi’s central bank kept its key lending rate at 26.0% MWCBIR=ECI, saying it felt its policy stance was tight enough despite fiscal risks and low agricultural output.
The Southern African country has struggled to rein in inflation, which is running at more than 30% in annual terms MWCPIY=ECI and caused protests in major cities this year.
Crippling dollar shortages have limited imports of goods like fuel and fertiliser and led to a thriving black market for foreign currency.
The Reserve Bank of Malawi said this year’s economic growth forecast had been lowered to 3.2% from 4.0%.
“This revision reflects weak agricultural performance due to delayed rainfall and prolonged dry spells in some parts of the country,” the central bank said in a statement.
“The MPC (Monetary Policy Committee) reaffirmed its earlier position that the current monetary policy stance is sufficiently tight to steer inflation downwards,” it added.
The bank’s policy rate has been at 26.0% since February 2024.
(Reporting by Frank Phiri; Writing by Sfundo Parakozov; Editing by Alexander Winning)
