The dollor falls on black market

Trading tales: dollar,maize tumble after elections

By Kondwani Nyondo 

Just days after Peter Mutharika was announced Malawi’s new president, black-market rates for the U.S. dollar and South African rand, as well as maize prices, have plummeted, leaving traders and consumers adjusting quickly.

Our team visited most of Lilongwe’s major dollar trading centers, including Gamestore and Devil Street. Traders there confirmed that the U.S. dollar, which had been trading at K5,000 per dollar a week before the elections, is now selling at around K3,000. South African rand has also fallen from K275 to K230.

We also visited maize markets at Mitundu and Zankutu in Lilongwe. In Mitundu, a 50kg bag of maize has reduced from K76,000 to K70,000, while some traders sell it at K69,000. At Zankutu, traders told us the drop reflects expectations of government intervention.

“We have heard that the new administration plans to distribute maize for free,” said one Zankutu trader, requesting anonymity. “Because of this, we are selling at lower prices rather than waiting for higher rates in December.”

In villages under Traditional Authority Kalumba, maize is being sold as low as K50,000, according to Joseph Banda. He explained that many households had been hoarding maize, anticipating December when prices are typically higher due to scarcity.

“People held onto their maize expecting profits from higher prices during the lean season. Now they are selling at lower prices because they fear government maize distributions will saturate the market,” Banda said.

Economist Wilson Gondwe attributes the shift to confidence in the new leadership. “What this means is that traders adjust their expectations based on anticipated government actions,” Gondwe said. “Even without new supply, prices drop because the market believes that the administration will stabilize food and forex availability. This is a clear example of confidence directly influencing market behavior.”

The rapid decline in both foreign currency and maize prices highlights how political transitions can immediately shape market behavior in Malawi. Street-level investigations suggest that traders are responding to anticipated policies and leadership, rather than changes in actual supply.

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