Fiscal policies are more potent to redress acute foreign currency exchange shortage in Malawi

Phiri Kampanje, Brian (2022): Fiscal policies are more potent to redress acute foreign currency exchange shortage in Malawi.

Abstract

The ultimate guardrail of forex reserves in Malawi should be the National Assembly whose sole existence is to serve the needs of the Malawians. The monetary authorities can intervene in the market forces to stabilise the value of the Malawi Kwacha against major trading currencies but have limited capacity to influence on how forex in Malawi can be externalised or what measures can be done to keep more forex only meant for crucial imports. Parliament through fiscal policies is able to do so and it is now time Malawi must adopt contractionary fiscal policies by spending less on non-essential expenses such as foreign travel, suspend purchase of new fleets of vehicles but above all, use the tax code to discourage importation of non-essential items into Malawi.

• Item Type: MPRA Paper
• Language: English
• Keywords: Fiscal; Malawi; Policies; Shortage; Forex
• Subjects: H - Public Economics > H3 - Fiscal Policies and Behavior of Economic Agents; H - Public Economics > H3 - Fiscal Policies and Behavior of Economic Agents > H30 - General; H - Public Economics > H6 - National Budget, Deficit, and Debt; H - Public Economics > H6 - National Budget, Deficit, and Debt > H62 - Deficit ; Surplus

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