Reserve Bank of Malawi lands on fake notes lead

Post was last updated: September 27, 2019

The Reserve Bank of Malawi (RBM) said it is following up leads that unscrupulous dealers are printing the Malawi Kwacha in neighbouring Zambia and Tanzania and infiltrating the fake notes into the country’s liquidity system.

The development poses a threat to the country’s economy in that the local unit may lose authenticity, reduce value of real money, destabilise inflation and reduce acceptance of paper money.

In an interview, RBM Deputy Governor Responsible for Bank Supervision, Grant Kabango, said the fight against the vice is, however continuous.

“We have a number of leads that are taking us to those jurisdictions. First of all we start from the people who are caught with counterfeit notes and then we follow up on who supplied them and that takes us through to the manufacturers,” Kabango said.

Economics Association of Malawi president, Chikumbutso Kalilombe, said the problem could cause transactional woes and also costs of printing replacement currency.

“On a broader economic spectrum, it would only be significant if it was rampant as that would cause business and individual losses and cause a lack of confidence with the physical currency.

“This can cause transactional problems and also costs of printing replacement currency with enhanced security features otherwise as the problem stands now, it is still minute but needs to be nipped in the bud,” Kalilombe said.

Last month, two men were arrested in Dowa District after being found in possession of fake K1,000 notes amounting to K140,000.

In 2018, RBM recorded 1757 pieces of counterfeit notes.

Together with other law enforcement agencies, the central bank prosecuted and won in court 28 cases involving illegal foreign exchange externalisation, transfer pricing and counterfeit currency equivalent to K587.7 million was forfeited to the Malawi government.

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