LILONGWE (Papius Liwonde, Malawi NewsNow) –Malawi government is considering plans to make the Chinese yuan legal tender alongside kwacha currency.
Capital Hill sources say the yuan will be used alongside kwacha and that all business transaction will be quoted either in local currency or yuan.
The United States dollar is currently held in significant quantities by government and institutions as part of their foreign exchange reserves.
However, the government is preparing a bill that will allow Chinese yuan to be another legal tender and as a reserve currency.
Calls to have Chinese yuang as a reserve currency were made to the region by Macroeconomic and Financial Management Institute of Eastern and Southern Africa (Mefmi), a cooperative venture among 10 Southern African countries.
In a statement, Mefmi spokesperson Gladys Siwela-Jadagu said most countries in the region have loans or grants from China and it would only make economic sense to repay in yuan.
Local economists have backed the idea, saying China has become a major source of foreign direct investment for Malawi and other African countries.