New Rule Aims to Boost Dwindling Foreign Reserves Amid Economic Pressure
The government of Malawi has introduced a significant new policy requiring foreign tourists to pay for services, particularly hotel stays, using hard currencies such as the US dollar or the Euro. This measure is a direct effort to bolster the country’s severely depleted foreign exchange reserves.
Finance Minister Joseph Mwanamvekha announced the rule during a mid-year budget review, citing intense pressure on reserves following the termination of the International Monetary Fund’s (IMF) Extended Credit Facility and a reduction in budget support from some international donors.
Implementing the Policy
Under the new directive, tourism businesses will be required to apply for special licenses that allow them to handle foreign exchange transactions directly with the Reserve Bank of Malawi.
The Minister stated that these steps are necessary to “save every dollar and close loopholes,” emphasizing the critical need to strengthen the country’s overall financial stability. The government also introduced other parallel measures, including shortening the required time frame for exporters to repatriate their earnings.
