Malawi Interest Rate

The Reserve Bank of Malawi lifted its benchmark lending rate by 200 bps to 26% during its first meeting of 2024 on February 1st to curb inflationary pressures and restore price stability. The Committee noted an intensification of inflationary pressures during Q4 2023, anticipating an extended period of elevated inflation before it begins to decline. The lagged effects of exchange rate re-alignment, higher maize prices owing to the anticipated lower maize production as well as worsening inflation expectations were the factors that have shifted the inflation path upwards. Malawi's annual inflation accelerated for the second consecutive month, reaching 34.5% in December, up from 33.1% in the previous month. Meanwhile, domestic economic growth is projected to pick up to 3.2% in 2024, from 1.5% in 2023, supported by an increase in public investment and recovery in mining and quarrying, manufacturing, information and communication, financial and insurance activities, and education sectors.