10 kwacha!

YTP · Guru

10 kwacha!

Ngwazi · Guru

YTP wrote:

I understand 10 kwacha is in coin form and already circulating! Thats very depressing and i shudder to think how bad mw will be in three years' time.

YTP,

There is nothing wrong,economically or otherwise,in having 10 Kwacha in coin form.This is an adminstrative decision that takes out the mostly used notes especially those in smaller denominations out of circulation as they suffer most due to wear and tear and they become limp,dirty,torn and mutilated to the point that they may not be verified as genuine in normal circumstances(The Market woman factor!!).The coin is durable and has a longer life span of around 10-20 years whilst notes that are of low denominations and "pass" through many hands in a short time have a life span of as short as 6 months,this is in contrast to the higher denomination notes that are not frequently exchanged or used and normally last up to 4 years.

So dont get worried,dont shudder yet but do so when you see the Reserve Bank introducing a 1000 Kwacha or higher denomination note,when this will happen,I will join you worrying and "shuddering".

Merry Christmas and a prosperous new year!

YTP · Guru

Ngwazi, you are right but on the other hand, this is a sure sign of major depreciation. After that long in having 10 kwacha bank notes, why change now? I hope this doesnt mean 20's will also be in coins for durability's sake! Cos next will be 50 quid etc. Our economy is going down faster than the speed of sound. A million k isnt much now and £1 is equal to mk275. Cant imagine how much lower its gonna be next week! I remember i used to go to Limbe via highway for k15 but now its k35! Merry xmas & happy 2007!

Ngwazi · Guru

YTP,

it would be a folly on our part to use the exchange rate as a measurement of how bad our economy is as we have Japan(the second biggest economy!!)with a worse exchange rate than Malawi against both the dollar and the pound.However,it is true that our economy is not in a good shape but we have to give credit to Bingu and his government for bringing in financial and economic prudence that have helped stabilise the economy that was surely on a slide under Bakili.At the moment our rate of inflation is hovering around the 15% mark(down from 28%!)and the projections are that it will reach the single digits come April next year.

I would not want to see a 20 Kwacha coin in the foreasable future or in my life time and I doubt that the government will take that route because even in countries that have high interest rates like Zimbabwe(1100%)they still have maintained the ZM$20 note.Yes coins are durable but they are good for smaller denominations only and in most cases the "market woman factor" applies to such smaller denominated notes and at present time despite the depreciation of the Kwacha,the "twenty" still maintains an aura of importance.

Oh!by the way you can now buy the Weekend Nation for MK70,I used to pay MK25 then!!

abre les ojos · Guru

I have to stress Ngwazi about the Japanese Yen. The reason is simply that the Japanese currency doesn't have a decimal point. So when you have 120 yen to a dollar it is essentially 1.2 technically.

Apart from that you're right about everything.

awmygawd · Guru

SA has a R5 coin, the UK a £2 coin; both are equivalent to well over K100. If anything, the K10 coin is too little, too late. The reserve bank could have started higher up, I think. K50 at least.

-- Edited by awmygawd at 12:22, 2006-12-25

awmygawd · Guru

abre les ojos wrote:

I have to stress Ngwazi about the Japanese Yen. The reason is simply that the Japanese currency doesn't have a decimal point. So when you have 120 yen to a dollar it is essentially 1.2 technically.

The same should have been done in Malawi ages ago. The tambala is completly obsolete now, we might as well do away with it altogether. Take look at this article on the cost of making a US 5 cent coin (worth about 7 Malawi Kwacha): http://articles.moneycentral.msn.com/News/TimeToKillOffThePenny.aspx . I wonder how much Malawian money has been lost in retaining the 1t, 2t, 5t, 10t, 20t, 50t & K1 coins.

-- Edited by awmygawd at 12:56, 2006-12-25

Ngwazi · Guru

abre les ojos wrote:

I have to stress Ngwazi about the Japanese Yen. The reason is simply that the Japanese currency doesn't have a decimal point. So when you have 120 yen to a dollar it is essentially 1.2 technically.

Abre,

I have to disagree with the above especially the last part where you say technically 120 Yen to a dollar is essentially 1.2.The Japanese deliberately devalued their currency to make their exports attractive and though they dont have a decimal point in their currency on the local market,this does not apply when it comes to forex trading as all rates have to be quoted in decimal points and all other major currencies have four decimal points whilst the Japanese Yen and the Italian lira have two decimal points mainly because they have units of such small absolute value.Japanese interest rate policy has been responsible for this low valuation of the Yen and therefore for you to have 120 Yen to the dollar it essentially means you have removed the last two decimal points on the Yen rate i.e 120.00(that is if you are trading on the Forex markets!)

awmygawd · Guru

What Abre meant is the Japanese haven't got the equivalent of Tambala, Cents, Pence, etc in their currency system. The smallest (and only) currency unit they have is the Yen.

Ngwazi · Guru

I agree with that and thats why I tried to differentiate between the "local market" and Forex trading when I mentioned about the values of the Yen.

awmygawd · Guru

Actually, I might be wrong. The Sen is Japanese right? Think I have to look that up.

-- Edited by awmygawd at 16:34, 2006-12-25

awmygawd · Guru

Ha ha! The Sen was discontinued decades ago. I wonder were I got that from... My bad.

eetchef · Senior Member

YTP wrote:

Ngwazi, you are right but on the other hand, this is a sure sign of major depreciation. After that long in having 10 kwacha bank notes, why change now? I hope this doesnt mean 20's will also be in coins for durability's sake! Cos next will be 50 quid etc. Our economy is going down faster than the speed of sound. A million k isnt much now and £1 is equal to mk275. Cant imagine how much lower its gonna be next week! I remember i used to go to Limbe via highway for k15 but now its k35! Merry xmas & happy 2007!

Is this a sign of major depreciation or devaluation?

YTP · Guru

eetchef wrote:

YTP wrote:

Ngwazi, you are right but on the other hand, this is a sure sign of major depreciation. After that long in having 10 kwacha bank notes, why change now? I hope this doesnt mean 20's will also be in coins for durability's sake! Cos next will be 50 quid etc. Our economy is going down faster than the speed of sound. A million k isnt much now and £1 is equal to mk275. Cant imagine how much lower its gonna be next week! I remember i used to go to Limbe via highway for k15 but now its k35! Merry xmas & happy 2007!

Is this a sign of major depreciation or devaluation?

YTP · Guru

Eetchef,
The last time i checked, depreciation still meant Devaluation, Deflation, Depression, Drop, Slump...
Need i go on? Come on now dude!?

YTP · Guru

Eetchef,
Maybe i should have posted it in the vernacular huh?! Or should i say our DIALECT?! Mortifying isn't it? Wish i could laugh but its not funny. Tee hee!!

Ngwazi · Guru

Users rebuff K10,K5 coins
BY HENRY MCHAZIME
06:23:49 - 27 December 2006

NEWLY introduced K10 and K5 coins are getting a cold shoulder from the public who say the new denominations reflect the lost power of kwacha.

But an official from Reserve Bank of Malawi (RBM) laughed off the suggestion saying the new coins are just a reflection of increased economic activities.

Commenting on issue, Consumer Association of Malawi (Cama) said an initial survey has shown people are not comfortable with the new coins, arguing the silver is easy to drop.

"Our assessment shows the coins are not popular, since they are bulky, above that the public fear that the kwacha is losing value," said Phiri Cama publicist.

He said RBM should have been transparent to explain why they are replacing paper money with coins.

"It is high time the central bank sensitise the people on why coins replace banknotes as time goes by," Phiri said.

However, Bankers Association of Malawi (Bam) has welcomed the move saying it would facilitate financial transactions.

Fanuel Kumdana Executive Director of Bankers Association of Malawi said the move a welcome development and that what is required is the assurance that business transactions would have the coins.

"Since we have been experiencing shortage in coins we hope RBM would ensure that the new coins are provided to commercial banks according to demand," said Fanuel Kumdana Bam executive director.

He said the new coins were the most demanded denomination on the market and as such it would make the market more fluid.

RBM spokesperson was not available Tuesday, but an official who seats on the Monetary Policy Committee (MPC) said the development has nothing to do with the value of the kwacha.

The front of the new coin bears the court of arms coated in silver while at the back there is an engrained man picking tea and the coin is covered in gold.

(copied from the Daily Times online edition)

YTP · Guru

Hmm...........

eetchef · Senior Member

YTP wrote:

Eetchef, The last time i checked, depreciation still meant Devaluation, Deflation, Depression, Drop, Slump... Need i go on? Come on now dude!?

If you really believe in what you mean to say then well let it get stuck there............wishing you a merry go round year.

YTP · Guru

eetchef wrote:

YTP wrote:

Eetchef, The last time i checked, depreciation still meant Devaluation, Deflation, Depression, Drop, Slump... Need i go on? Come on now dude!?

If you really believe in what you mean to say then well let it get stuck there............wishing you a merry go round year.

Oh boy, dont i just love a bad loser?! Wishing you a merry go round '07 as well. Amazing how stubborn we can be!