Treasury bought back securities worth K8 billion from individual and institutional investors as part of public debt management strategy, the Reserve Bank of Malawi (RBM) has said
The reverse auction for the securities took place yesterday through a competitive price-based method using multiple price format targeting K8 billion worth of securities.
RBM spokesperson Mbane Ngwira said the auction is part of government’s debt management strategy to move out of short-term debt to longer-term securities.
Weighing in, market and economic analyst Cosmas Chigwe said the move could potentially ease pressure on liquidity in the market.
“This is a normal auction as it can always happen in an environment where interest rates are going down as it gives room to refinance the debt at lower costs,” he said.
Malawi has in recent years struggled with the management of public debt which stood at 62 percent of the gross domestic product (GDP) as at mid 2019. Minister of Finance, Economic Planning and Development Joseph Mwanamvekha said in his 2019/20 National Budget Statement that Treasury was putting in place policies that will help bring down public debt in the medium to long-term.