Malawi devalues kwacha currency by 50% after IMF calls
Published: 7th May 2012 15:13:34
Malawi's central bank has devalued its currency, the kwacha, by 50% and scrapped its peg to the US dollar, in a bid to improve relations with donors.
The International Monetary Fund has long urged Malawi to cut the value of its currency, saying this would boost exports and reduce demand for imports.
However, ex-President Bingu wa Mutharika, who died in April, said devaluation would lead to inflation.
New President Joyce Banda is trying to persuade donors to restore aid.
One dollar is now worth 250 kwacha, up from 168.
"The devaluation of the kwacha and the liberalisation of the foreign exchange market are expected to continue the government's efforts to reach agreement with the IMF," said Reserve Bank of Malawi Governor Charles Chuka, adding that this would hopefully lead to more donor funding in the next few months.
Economists say they do not expect the move to immediately lead to higher prices, as many businesses were expecting the move and were already using the new exchange rate.
In recent years, Malawi has run short of foreign currency after donors cut aid and demand fell for its main export, tobacco.
This led to a lack of fuel in the country.
Last week, President Banda said she did not want Sudan's President Omar al-Bashir, accused of war crimes, to attend a summit in July.
She says she feared the "economic implications" if Mr Bashir attended the African Union meeting in the country.
This was another about-turn on the position of her predecessor.
She has also fired Mutharika's widow, Callista, from her job as coordinator for safe motherhood, the AFP news agency reports.
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Harvard CitationBBC News, 2012. Malawi devalues kwacha currency by 50% after IMF calls [Online] (Updated 7th May 2012)
Available at: http://www.ukwirednews.com/news/1426981/Malawi-devalues-kwacha-currency-by-50-after-IMF-calls [Accessed 24th Jul 2014]
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With the doors to its brand new £1million training centre officially open, one of the UK's leading apprentice training providers, Bristol based S&B Automotive Academy, is showcasing its world-class facilities by launching a series of foreign student exchanges for the first time in its 41-year history. To get a flavour of what life is like as an apprentice in the UK, the Academy hosted 16 apprentice engineers and bus drivers from the G9 Automotive College in Hamburg, Germany, as part of a Europe-wide vocational training initiative called the ‘Leonardo Programme’ with support from the European Social Fund. In a reciprocal arrangement, S&B will be sending nine apprentices to Germany during February 2012 so that they can get an appreciation of life in the automotive industry on the Continent. A further three German exchange groups are being planned for next year. Designed to assist the development of vocational skills and training across Europe, including work placements for trainees, the Leonardo Programme has a budget of €1.75bn, which is helping to encourage UK organisations to work with their counterparts abroad. In what is expected to be another challenging year for employers in the UK automotive sector, S&B’s Chief Executive, Jon Winter, claims that the exchange initiative will bring many benefits to the Academy and its apprentices: “In a world of global automotive brands, it’s important for our learners to understand the international context of the industry they have chosen to make their career. This new exchange programme will enable apprentices and Academy staff alike to achieve a better understanding of the challenges and opportunities within the automotive arena in Europe. With the Academy’s influence also extending to the USA and Asia, there’s every possibility that this initiative could move further afield in the future.” Continued Winter: “The need for skilled technicians across the world is on the increase and we actively encourage our apprentices to look at broader horizons during their training. Many of them have already learned the phrase ‘Vorsprung durch Gelehrtheit’, quite simply, ‘Advancement through learning.” In the 2010/11 academic year, S&B doubled the number of successful Apprenticeships over the previous year with some 350 apprentices graduating from the Academy. At the same time, achievement levels reached an all-time high with an overall success rate of 85%. For those learners on the Advanced Apprenticeship three-year programme, success rates were even higher, at over 98%. PHOTO CAPTION: As part of their exchange visit, S&B Automotive Academy arranged for the German apprentices to visit Hampshire bus operator, Bluestar, at its Barton Park depot. The students are pictured with S&B’s Andy West (3rd right) and Steve Prewett, Bluestar’s Area Engineering Manager (2nd right). Ends http://www.sandbaa.com