The local currency is the Malawi kwacha, symbolised MWK. The currency is freely convertible but impossible to get rid of outside Malawi and, as of December 2012, trades at around MWK330 to the US dollar, MWK425 to the euro and MWK525 to the pound sterling. Forex will also be accepted by almost everybody, particularly for larger purchases.
You can exchange Malawian kwacha into Zambian kwacha at the border, either at the banks or on the black market too.
Larger foreign bills are favoured and can get much higher rates. At times, it can be easier to not even go to the black market and simply make purchases with the foreign currency.
Credit card acceptance is improving. Visa and MasterCard are accepted by larger hotels, and some ATMs. ATMs are becoming much more common and can be used at many banks in major cities, though most notably, Master card and VISA is the card of choice.
Travellers' cheques can be changed in banks, forex bureaus and in some high-end hotels. The number of hotels accepting payment by travellers' cheque seems to be shrinking. Don't rely on them unless you have spoken to the hotel. Also, banks often want to see your original paperwork from your bank when you purchased the traveller's cheques. Without it, you may not be able to exchange them. US dollars cash is your best bet, and it gives a better exchange rate.
Handmade wood and soapstone carvings, wood and cane furniture, colourful textiles, pottery, beadwork have high standards - especially at the Mua Mission to the south of Salima. They have their own shop and traditional musical instruments make good souvenirs throughout Malawi. Australians and New Zealanders will need to factor in the fumigation and quarantine charges when they return home, though.