EU provides €60m to cushion Malawians against devaluation shocks

European Union (EU) has provided the Government of Malawi with €60 million in aid to help the latter cushion citizens against the economic shocks emanating from the recent devaluation of the local currency against the United States dollar (USD).

The Reserve Bank of Malawi (RBM) recently announced a 44 percent realignment of the kwacha against the dollar, a move the Central Bank said was aimed at correcting supply-demand imbalances in the forex market.

The development has triggered sudden rise in prices of basic commodities. On Monday, the Minister of Finance and Economic Affairs Simplex Chithyola outlined a number of measures to cushion poor Malawians from the shocks arising from the recent 44 percent devaluation of the currency.

Among others, Chithyola disclosed that President Dr. Lazarus McCarthy Chakwera and his administration have negotiated with development partners such as the World Bank and Multi Donor Trust Fund for adjustments to Social Cash Transfer Programs in order to cushion the poor against the effects of the alignment.

And as if to add icing to the cake, EU Ambassador to Malawi Rune Skinnebach told local journalists in Lilongwe that his union had committed €60 million towards the same cause.

Skinnebach defended the decision the Government of Malawi had taken to devalue the currency, saying it reflects a true value of the kwacha against other major currencies.

He assured that EU would complement the government’s action plan designed to cushion the population and stimulate the economy’s growth.

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