Malawi

Malawi's central bank cut its benchmark interest rate for the first time this year to boost economic activity, saying inflation and growth are expected to be lower this year than expected in July.

Malawi's central bank cut its Liquidity Reserve Requirement (LRR) and its Lombard rate to immediately boost liquidity in in the banking system and lower the cost of funds to give commercial banks an incentive to support those economic sectors that are hit by the COVID-19 pandemic.

The Monetary Policy Committee (MPC) of the Reserve bank of Malawi, at its first meeting for 2020 held on 29th and 30th January, decided to maintain the Policy Rate at 13.5 percent and the Lombard Rate at 0.4 percentage points above the Policy Rate.

Malawi's central bank left its policy rate steady at 13.50 percent and confirmed it expects inflation to average 9.0 percent this year, pushed up by higher maize prices, but this is considered temporary and not a risk to achieving the inflation objective of 5 percent by 2021.