What is the Currency of Malawi?
Malawi’s economy is based on agriculture and substantial aid from the World Bank and the IMF. Its financial sector is relatively small even by the regional standard with only 10% of the population having access to banking services. The banking system of Malawi offers a variety of conventional financial services with an increasing focus on down-market products. Malawi’s financial system depends heavily on the stability of the Malawian Kwacha, the country’s official currency. The rising inflation in Malawi has had a negative impact on the Malawian Kwacha leading to its devaluation subsequently affecting the financial sector.
Both Malawi and Zambia use Kwacha as their official currency. Although adopted based on the Zambian Kwacha, the Malawi kwacha and the Zambia kwacha are two distinct currencies and cannot be used interchangeably. The word Kwacha was adopted from a Bemba word meaning “dawn” reflecting the motto of Zambian people, “New dawn of freedom.” Malawi kwacha has been the official currency of Malawi since 1971, replacing several other currencies including the Malawian Pound, South African Rand, and Rhodesian Dollar. It replaced the Malawian pound, which had been in use from independence in 1964 at a fixed rate of two kwacha for every pound. As of 2014, one British pound exchanged for 227.681 kwacha while one South African Rang exchanged for 149.8 kwacha. At the time of change of currency in 1971, the Malawian currency was already decimalized. The Malawian Kwacha is subdivided into 100 tambalas and its ISO 4217 code is MWK. It is often presented with the symbol MK. In 2012, Malawi dropped its currency peg to the US dollar leading to a significant devaluation of the kwacha by about 50%.
The first coins were introduced in 1971 when Malawi adopted the kwacha. The coins were in several denominations including 1, 2, 5, 10, and 20 tambalas. 50 tambala and one kwacha coins were added to the existing denominations of coins in 1986 while 5 and 10 kwacha coins bearing a mint date of 2001 were introduced in January 2007. In 2012, 1, 5, and 10 new kwacha coins were released into circulation. One and two tambala coins are made of copper-plated steel while one kwacha coins are made of brass-plated steel.
Banknotes dated 1964 were released alongside the first coins in 1971 and were in the denominations of both tambala and kwacha. In 1973, 2 kwacha notes were discontinued and in its place was the 5 kwacha note. In 1883, 20 kwacha notes were introduced into circulation. Between 1986 and 1992, 50 tambala and 1 kwacha notes were discontinued from circulation while 50, 100, 200, and 500 kwacha notes were introduced between 1993 and 2001. To ease the alarming cash shortage in the country, 2,000 notes were released into circulation. As of 2008, seven denominations of banknotes are in circulation with the denominations ranging from 20 to 2000 kwacha. The Reserve Bank of Malawi has undertaken to revise its new family of banknotes so that they can become user-friendly to the blind.
Your MLA Citation
Your APA Citation
Your Chicago Citation
Your Harvard CitationRemember to italicize the title of this article in your Harvard citation.