The Reserve Bank of Malawi (RBM) has rejected bids worth K145.58 billion at its Treasury Bill (T-bill) auction held during the week ending February 6, 2026 in a push seen to rein in costly borrowing.
RBM conducted auctions across all three maturities—the 91-day, 182-day and 364-day tenors—but turned them all down, resulting in zero funds raised during the period under review.
Figures from the auction, contained in the Bridgepath Capital’s Weekly Financial Market Update, show that demand was strongest for the 364-day paper, which accounted for over 60 percent of total applications, with the remainder spread across the shorter-dated instruments.
The latest outcome extends a streak of failed auctions, whereby on January 6, 2026, RBM rejected T-bill bids valued at K47.8 billion, followed by another K69.7 billion the following week.
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Most recently, all bids worth K83.05 billion were turned down during the auction held on January 27, 2026.
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The move is seen as the government’s stand to reduce expensive domestic borrowing as it grapples with a high debt stock recorded at K24.2 trillion in September 2025.
Treasury spokesperson Williams Banda said the government rejected the auction because it was no longer interested as the funding needs were already met.
“The government is reducing interest payment bills,” Banda said
Economist Marvin Banda said the move signaled what he termed “policy pussyfooting” that, he said, would ultimately be tested by the performance of government finances.
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Banda said the stance was part of broader efforts to tame excessive sovereign borrowing that has crowded out private sector lending and distorted credit allocation.
“The market was taking advantage of the shape of the yield curve to borrow at the short end, increasing financing needs for the government,” he said.
According to auction data, investors shifted demand away from the 91-day paper, which attracted 22.68 percent of bids, towards longer maturities, with the 182-day and 364-day instruments accounting for 16.13 percent and 61.18 percent, respectively, in what Banda said was an attempt to entice the authorities to accept allocations.
However, he noted that stronger tax revenue collections in December 2025 and January 2026, combined with a reduced wage bill and staff-related costs, had temporarily eased pressure on public finances.
Domestic debt comprises 65 percent of Malawi’s total public debt stock, representing over K15 trillion.
