An announcement by the authorities to start selling cheap dollars to some sectors of the economy has knocked down demand on the forex black market, with the dollar slumping from an all-time high of K5,000 last week to around K3,000 at the weekend.

Last week, government officials announced that the Reserve Bank of Malawi (RBM) would support some critical sectors such as the importation of second-hand clothes and cooking oil with cheap dollars as one way of curbing the sharp rise in consumer prices.

A number of black-market operators told The Daily Times at the weekend that since the announcement was made on Tuesday, demand for dollars has significantly receded, forcing black market rates to tumble.

Other players said the flow of tobacco dollars ahead of the next marketing season had improved liquidity on the formal market, where the greenback is offered at the official rate.

RBM Governor Macdonald Mafuta Mwale Sunday said while the central bank does not comment on unregulated and illegal developments, the true value of the currency remains that at which real and the majority of Malawians can afford to buy at.

“Those participating in this market are indulging themselves in economic sabotage that must be dealt with, for it is a major cause of our suffering as a country due to its inflationary pressure and its badly affecting the lives of our people.

“In Malawi, everybody must do business legitimately; that is, to be within the laws of the land so that we prosper together and protect vulnerable Malawians. If you can’t open a bank, go open a bureau and if you can’t open a bureau, find something else to sell, not money,” Mafuta Mwale said.

The central bank Czar said RBM was pleased with the support and participation of the general public in reporting those indulging in the malpractice, a development he said led law enforcers to do their job.

“This only shows that people of goodwill and those who love Malawi are tired of being reaped by these malpractices.

“I, therefore, encourage all [people] to come forward and continue reporting [suspects] to law enforcers. Together, we will redeem Malawi,” Mafuta Mwale said.

Financial Market Dealers Association President Leslie Fatch said the apparent recent drop in exchange rates spoke to two fundamental issues which were also highlighted when the rates were reported to be high.

“The first issue is market dynamics, where we have for a long time lamented the imbalance, where demand outweighs supply.

“The second issue is speculative tendencies due to the heighted shortages since December 2024, when a new regulation was introduce