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| Business |
| Forex policy under review |
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by
Aubrey Mchulu, 03 March 2004
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14:08:55
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The Reserve Bank of Malawi (RBM) has said it is planning to relax foreign exchange controls in a bid to make the country’s investment climate more attractive to both local and foreign investors.
Confirming the move which is currently being discussed by stakeholders, RBM general manager (economic services) Wilson Banda said in an interview on Monday that before investing in a country, foreign investors usually look at factors such as permits and how easily they can transact into and outside a country.
“We want to create an environment that is conducive to them by making forex transactions flexible,” said Banda, adding RBM is currently seeking input from stakeholders, among them, government and commercial banks.
On local investors, Banda, who said the measures are part of forex liberalisation, said RBM wants a businessman to go out to South Africa, for instance, and pay for his imports without hassles.
“We believe economic growth can only come from the private investors and so if we create an environment that is conducive to private investment, it will be easy to achieve growth,” he said.
RBM’s move comes barely six months after some economists, amid forex shortages which forced the central bank to slap a ban on all random buying of foreign exchange to save the few reserves the country had last September, said it was time the policy that allows people travelling abroad on business to get US$5,000 per trip and US$3,000 for one going on holiday was reviewed because it was a clear loophole people were using to take money out of the country.
Banda, however, said experience has shown that too many controls create avenues for more abuse.
RBM sources said this week that, among other things, restrictions of US$3,000 per trip for holiday allowance will be trimmed to maximum of US$1,000 per day.
The sources also said the US$5,000 maximum business allowance per trip is also being reviewed.
To this, Banda said RBM is looking at a situation where the restrictions can be relaxed even further.
But he said the relaxed measures will be implemented with caution with due consideration of factors like time of the year and forex reserves.
A Blantyre banker agreed with Banda that the changes should indeed be implemented with caution because the restrictions were put to check abuse and in national interest. |
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