Malawi cuts benchmark interest rate to 24% as inflation pressures ease

2026-03-10 11:13:05

Reserve Bank of Malawi has reduced its benchmark interest rate by 200 basis points to 24 percent, citing a gradual easing in inflationary pressures in the economy.

The decision was announced on Thursday following the first Monetary Policy Committee (MPC) meeting under the bank’s new governor, George Partridge.

The rate cut marks the first adjustment to Malawi’s policy rate since February 2024, when the country was grappling with persistent inflation and currency pressures.

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What they are saying

The central bank said the decision reflects cautious optimism about the country’s improving inflation outlook.

“The 200-basis-points reduction in the policy rate is a cautious and measured adjustment, reflecting the improving inflation outlook,” the bank said in a statement.

The MPC noted that inflation has declined for three consecutive months, reaching 24.9 percent year-on-year in January.

Despite the recent slowdown, inflation has remained above 20 percent since mid-2022, indicating that price pressures are still elevated.

The bank indicated that the rate cut is intended to support economic recovery while maintaining vigilance over inflation risks.

Get up to speed

The policy move comes amid broader efforts by Peter Mutharika to revive Malawi’s fragile economy following his election last year.

As part of this strategy, the president appointed George Partridge as central bank governor in January to steer monetary policy during a period of economic challenges.
Malawi is seeking to secure a new support programme from the International Monetary Fund after its previous arrangement was terminated.
The earlier IMF programme was discontinued after failing to restore macroeconomic stability.

The country continues to grapple with significant fiscal pressures, with public debt estimated at over 90 percent of gross domestic product (GDP).

These economic constraints have intensified the need for policy measures aimed at stabilising inflation and supporting growth.

What you should know

Several African central banks are adjusting their monetary policy stance as inflation begins to moderate across the continent.

The Central Bank of Nigeria recently reduced its Monetary Policy Rate by 50 basis points to 26.5 percent from 27 percent at its 304th MPC meeting in February. The Cash Reserve Ratio was retained at 45.0 per cent for commercial banks and 16.0 per cent for merchant banks.

The Liquidity Ratio was maintained at 30.0 per cent.
The Standing Facilities Corridor was fixed at +50/-450 basis points around the MPR.
The committee noted that although inflationary pressures are easing, maintaining other policy parameters reflects a cautious stance aimed at safeguarding financial system stability.

Also, the Bank of Zambia lowered its benchmark rate for the second consecutive meeting to 13.5 percent from 14.25 per cent.

Meanwhile, the Bank of Uganda held its Central Bank Rate steady at 9.75 per cent, citing a stable inflation outlook.

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