Monetary authorities are touting the tightening of policy rate on easing inflation which dropped 0.2 percentage points in third quarter to 28.2 percent.
The rate averaged 28.2 percent between July and September –slightly easing from 28.4 percent in the preceded quarter after a period of interest rates hikes.
The Reserve Bank of Malawi’s (RBM) policy rate have been rising for the past two years from 14 to 24percent –a move the latest monetary policy report says has now contained nonfood inflation with projections of taming food inflation soon.
“Food inflation slightly increased to 38.5 percent in the third quarter of 2023 from 38percent in the preceding quarter.
“However, the 0.5 percentage point uptick in food inflation in the third quarter of 2023 was significantly lower compared to 6.5 percentage points increase in the previous quarter.
“This suggests that food prices could be eventually plummeting,” reads the report in part.
RBM’s Director of Economic Policy and Research Kisu Simwaka said at a Monetary Policy Technical Forum that the policy stance is set to contain inflation going forward as they still target 5percent in long-run.
Meanwhile, the International Food Policy Research Institute said maize prices moderated and rose by an average of 1percent to 696kwacha 90 per kilogram in September, compared to increases of 6 percent and 27 percent in August and July, respectively.
However, analysts expect inflationary pressure to pile following the recent devaluation and the cyclical scarcity of food associated with lean period which spans between November and March.
In his address when highlighting the set safety nets aimed at cushioning the impacts of devaluation, Finance Minister Simplex Chithyola said government will monitor to act against business that raise prices illegally.