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The official rate of Malawi's currency has been cut by a third as the impoverished southern African nation seeks to repair ties with the International Monetary Fund, the country's central banker said Monday.
The move is just one in a series of steps President Joyce Banda's government has taken that sharply distinguish her administration from that of her predecessor, who died in office last month.
"The devaluation of the kwacha and the liberalization of the foreign exchange market are expected to continue government's efforts to reach ... agreement with the IMF," the central bank chief said at a press conference in Malawi's capital, Lilongwe. "The currency adjustment is further expected to have the effect of reducing demand for imports of consumer goods in favor of domestically produced goods."
After taking office following her predecessor's death of a heart attack last month, Banda had pledged to repair a relationship the IMF had called "off track." The late President Bingu wa Mutharika had rejected IMF advice to devalue the kwacha.
Chancellor Kaferapanjira, executive director of the Malawi Confederation of Chambers of Commerce and Industry, said businesses had expected a devaluation and had already factored it into their prices.
Last week, in another departure from the past, Banda had expressed wariness at welcoming her Sudanese counterpart, accused of war crimes, to a continental summit in July.
Speaking at a news conference Friday, Banda said a visit by Sudan's president would be frowned upon by Malawi's international donors, an argument Sudan criticized in a statement Monday. But she said the final decision on whether he will be invited to an African Union summit "will have to be arrived at through a consultative process."
Mutharika had welcomed Sudan's Omar al-Bashir at a regional summit last year and accused the International Criminal; Court of targeting Africans. The Sudanese leader has visited African, Asian and Middle Eastern countries despite ICC warrants for his arrest on charges of genocide, crimes against humanity and war crimes in Sudan's Darfur region.
Banda also has reshuffled her Cabinet, ousting, among others, Peter Mutharika, the late president's brother who had been foreign minister.
Malawi's relations with foreign donors had been strained under the Mutharikas. The late president had expelled Britain's High Commissioner to Malawi after the envoy was quoted in a local newspaper expressing concern that the president was increasingly intolerant of criticism and that human rights were under attack. Britain, a former ruler of Malawi, then indefinitely suspended aid to Malawi, which in the end invited the envoy back.
Earlier this year, a U.S. aid agency that rewards good governance suspended $350 million worth of assistance to Malawi.
As her predecessor's vice president, Banda had resisted his efforts to promote his brother over her as his anointed successor, which many saw as a ploy by the former President Mutharika to extend his influence beyond the constitutionally allowed two terms.
Banda's refusal to endorse Peter Mutharika as a presidential candidate led to her expulsion from the governing Democratic Progressive Party, which Peter Mutharika now heads.
After Mutharika died April 5, the government took two days to confirm his death and allow Banda to step in. The delay had led to speculation that Banda's rivals were trying to prevent her from becoming president, even though the constitution decrees the vice president should take over.
Banda, known for her work promoting women's development, was sworn in April 7 to complete Mutharika's second term, which ends in 2014.