RBM Board of Directors trained on Swaps and Reserves Management

Holding and managing official foreign exchange reserves are among the core functions of a central bank. For many countries, official foreign exchange reserves are used as self-insurance against balance-of-payments crises and for supporting exchange rate policies. The availability of sufficient reserves insulates countries against disruptions and volatility in international capital markets and during financial crises, including the ongoing COVID-19 pandemic. To carry out these functions and create resilience in times of crisis, a central bank needs to have in place a sound governance and oversight framework for its reserve management operations.

As part of its efforts to strengthen the governance framework of its reserves management function, the Reserve Bank of Malawi (RBM) requested MEFMI to provide customised training on Foreign Exchange Reserves Management and Swaps for members of its Board of Directors and Executive Management. The training was conducted during the period 26 – 28 July 2022 in Lilongwe, Malawi. Its objective was to strengthen the governance and controls around foreign reserves operations and align them with sound practices.

The training was attended by a total of nine (9) participants, comprising five (5) Independent Board Members and four (4) members of the Executive Management of RBM. Of the nine (9) participants, 56 percent (or 5 participants) were female and while 44 percent (or 4 participants) were male. The training enhanced the participants’ knowledge of foreign exchange reserves management, and the use of swaps in foreign exchange reserves operations. A key outcome of the training was the need for MEFMI to build capacity within reserves management units on negotiation of swaps and other structured financing arrangements.

The training was facilitated by a team of three (3) resource persons, namely Mr. Michael Naameh of the Reserves Management Organisation in the United Kingdom, Mr. Farouk Mujtaba Muhammad of the Central Bank of Nigeria and Mr. Benoni Okwenje of Centenary Bank in Uganda. The overall administration of the training was done by Mr. Tiviniton Makuve, Mr. Patrick Mutimba and Charity Mangwende of the MEFMI Secretariat.

Prepared by Tiviniton Makuve