Treasury Bill (T-bill) yields have declined by 1.7 percentage points to an average of 22.44 percent in April from 24.14 percent the previous month, an indication that the government securities demand might be less than supply.
The data, provided by Nico Asset Managers, indicates that in the period under review, total T- bills applications stood at K26.11 billion of which K23.06 billion was allotted resulting in a 11.70 percent rejection rate. 
According to the report the 364 days paper accounted for the highest subscription rate in April 2017 at 74.27 percent, followed by the 182 days paper at 18.62 percent and the 91 days paper at 7.11 percent.
Apparently authorities have eased on domestic borrowing sticking to its fiscal rules in recent times.
In his State of Nation Address last Friday, President Peter Mutharika while admitting that interest charges for domestic debt which is characterised by short-term debt, remains high, he said government is strengthening debt management practices through adherence to public debt policies and medium term debt strategies.
Said Mutharika: “We intend to carry on with these reforms in the 2017/18 Financial Year in order to spur investment and economic growth. We will, therefore, continue with initiatives to reduce the deficit to levels below internationally acceptable thresholds (3 percent of GDP [gross domestic product]) to reduce pressure on domestic borrowing and interest rates.”
In March this year, the central bank slashed the policy rate by two percentage points to 22 percent from 25 percent, in view of the disinflation process in the recent past and inflation outlook.
In view of this commercial banks in the country also slashed their base lending rates, nonetheless, businesses and economists have said the country’s interest rates, at around 30 percent, are still high.
Commenting on the decline of the T-bills, a market analyst in an interview with Business News said the decline in T-bills as positive saying the fall in T-bills rates may lead to a further fall in commercial bank rates.
He noted that T-bills rates are positively correlated to commercial bank interest rates, which means that as the T-bill rates rise, so do commercial banks interest rates and converse applies. n
