Forex trading operates within a complex regulatory framework in Malawi, governed primarily by the Exchange Control Act and overseen by the Reserve Bank of Malawi (RBM). The country maintains foreign exchange controls that require government authorization for most foreign currency transactions (1). Under the current legal structure, only the Reserve Bank and authorized dealers are permitted to handle foreign exchange transactions, while individuals and businesses face restrictions on direct forex dealings.
The Reserve Bank of Malawi serves as the central regulatory authority for all foreign exchange activities in the country. The RBM has implemented strict exchange control measures, including requirements that exporters surrender a percentage of their foreign exchange earnings to the central bank at official rates (2). These regulations are designed to manage the country's critically low foreign exchange reserves and maintain economic stability amid ongoing balance of payments challenges.
"The RBM has a mandate, as does any other central bank, to manage the exchange rate to maintain a sustainable balance of payments position, attain stable domestic prices, and foster growth in real income."
While retail forex trading for individual investors operates in a legal gray area due to these strict exchange controls, the regulatory framework primarily focuses on commercial transactions and export earnings. The Exchange Control Act provides the legal foundation for these restrictions, requiring permits and authorizations for most foreign currency activities. Potential forex traders in Malawi should consult with licensed financial institutions and legal professionals to ensure compliance with current regulations, as enforcement and interpretation of these laws can impact individual trading activities.
Source:
https://malawilii.org/akn/mw/act/1984/17/eng@2014-12-31
https://www.trade.gov/country-commercial-guides/malawi-trade-financing
Last updated: 31-05-2025 Disclaimer: This article does not provide legal advice. If you need legal advice, please contact an attorney directly.
