Assuring the International Monetary Fund (IMF) that Malawi is committed to enhancing the mandate of the RBM, the Minister of Finance Joseph Mwanamvekha and RBM Governor Dalitso Kabambe confirmed of the development to cease the central bank from financing government in its national budget deficits.

RBM spokesperson Mbane Ngwira confirmed to The Nation newspaper that the above has been implemented. In line with the RBM Act of 2018, RBM will no longer be converting ways and means cash advances to government into government securities, an arrangement prohibited under the legislation.

Last month, the government announced about buying back securities worth K40.7 billion from individual and institutional investors as a public debt management strategy, as Finance Minister Joseph Mwanamvekha hailed the idea as a means to retire expensive short-term debt and opt for cheaper long-term debts. RBM backed the move, also announcing that it will oversee the deals, as a directive from the Ministry.

A month forward, Kabambe and Mwanamvekha two have assured the IMF institution that they will prohibit the central bank from purchasing government securities on the primary market and limiting credit to government to short-term advances that must be repaid in cash.