The government turned down K167 billion in Treasury bills during the March 2026 auctions, despite investors offering a total of K567 billion across various maturities.
Official results released by the Reserve Bank of Malawi show that only K400 billion worth of Treasury bills were accepted, underscoring a sustained cautious borrowing stance.
Investors applied heavily for the 364- day tenor, with bids exceeding K421 billion, but the government allotted just under K356 billion.
The 182-day bills attracted over K66 billion in bids, of which, about K40 billion was taken up, while the 91- day tenor saw modest interest of around K12 billion, nearly all of which was accepted.
Yields remained stable throughout the month, holding at 12 percent for 91-day bills, 15 percent for 182-day bills, and 17 percent for 364-day bills.
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The consistency suggests the government is prioritising cost management over volume, even as liquidity in the market remains strong.
For instance, on March 2, investors submitted K35.4 billion in bids in which the government took nothing, on March 11, investors offered K24.7 billion but the government accepted K134.81 million representing less than one percent and on March 16, bids worth K12 billion came in on long-term paper but the government rejected every single one.
Presenting the budget statement recently Finance Minister Joseph Mwanamvekha told Parliament that the administration’s priority is restoring macroeconomic stability through fiscal consolidation and impactful reforms.
He pledged to cut the fiscal deficit and restrain borrowing despite a public debt stock that has swelled to K23.9 trillion, or 90.9 percent of GDP.
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In a recent interview, publicity secretary of the Financial Market Dealers Association, Rupert Nkhono, said while cash offers may still attract traction, the long-term impact of reduced rates is unclear.
Standard Bank Malawi Chief Executive Philip Madinga recently said the bank’s portfolio has been kept strictly within one-year maturities since 2023, a move he described as a safeguard against fiscal uncertainty.
Meanwhile, commercial banks have reduced their reference rate to 20.80 percent, effective yesterday, extending a downward trend that has seen rates fall by more than 4 percentage points since February.
The move follows the Reserve Bank of Malawi’s decision to cut the policy rate by 200 basis points to 24 percent, citing easing inflationary pressures.
