A yield curve is a relationship between the interest rate and the time to maturity of the debt instrument denominated in a given currency. For the issuer, an interest rate is the cost of borrowing while for the investor; the rate represents a measure of return from investment.
The Malawi Government securities yield curve is derived from the relation between interest rates of Treasury bills and indicative bond yields and the time to maturities of bonds of different tenors. The interest rates of treassury bills are the prevailing weighted average rates for both 91-day and 182-day and 364-day ppaers while the interest rates for Treasury bonds are the average indicative yields for bonds based o years to maturity. Thus, our estimation of the yield curve entails use of only a few known yields for certain maturities while yields for other maturities are estimated by interpolation.
For the investor, a yield curve is useful for understanding conditions in the financial markets with an aim to seeking trading opportunites, measuring expected returns on bonds and inflation expectations. For issuers, the yield curve acts as a benchmark for pricing other financial instruments in the market as well as predicting the yield/prices of future government issuances.
- Monetary Policy Report-November 2020 Nov 23, 2020
- National Payment System (NPS) Report-Third Quarter 2020 Nov 20, 2020
- Opening Remarks by the Governor, Dr Wilson T. Banda at the 2020 ECAMA Annual Conference 2020, 19th November 2020 Nov 20, 2020
- September 2020 Monthly Economic Review Nov 17, 2020
- Speech by the Governor of the Reserve Bank of Malawi, Dr Wilson T Banda at the 2020 ICAM Conference, Mangochi Nov 16, 2020
- Commercial Banks (Assets and Liabilities) Jan 2000-Sep 2020 Nov 12, 2020
- Monetary Authorities Jan 1975- Sep 2020 Nov 12, 2020