LILONGWE-(MaraviPost)-President Peter Mutharika’s government has imposed a new rule requiring foreign tourists to settle hotel bills in hard currencies including U.S. dollars and euros, Finance Minister, Joseph Mwanamvekha, has announced.

Mwanamvekha said the move forms part of a broader strategy to bolster Malawi’s shrinking foreign exchange reserves.

He explained that the country’s reserves have come under severe pressure since the termination of the International Monetary Fund’s Extended Credit Facility earlier in the year.

In addition, Mwanamvekha disclosed that some donor funding has been cut back, further exacerbating the shortage of foreign currency.

To implement the new policy, tourism businesses will need to apply for special licences, enabling them to conduct foreign exchange transactions directly with the central bank.

These measures are intended to capture and conserve every available dollar, closing loopholes in the current system, the minister said.

Alongside this, the government is shortening the time exporters have to repatriate their foreign earnings from 120 days to 90 days.

Exporters will also be required to surrender any excess foreign currency after they have settled their import bills.

In a further tightening of the foreign currency regime, Malawi is banning short-term foreign-exchange derivatives, saying that some market players have abused these tools.

Mwanamvekha added that these derivative products will not be reintroduced until stricter regulations are in place to prevent misuse.

Analysts suggest that the policy represents a partial “dollarisation” of the hospitality sector—an approach that some hotels in Malawi have already used voluntarily to hedge against the volatility of the kwacha.

The new regulation may also have broader implications for tourism, as visitors adjust to the requirement to carry or convert to hard currency to pay for accommodation and other services.

The Maravi Post