The Reserve Bank of Malawi (RBM) has projected that the cost of replacing damaged banknotes will reach K69.8 billion this year, a significant increase from the K50.6 billion spent in 2025.
The central bank’s estimate highlights the growing operational burden on Malawi’s monetary authority as circulation quality deteriorates.
The 38% year-on-year jump in replacement costs underscores persistent challenges in currency management.
The 38% year-on-year jump in replacement costs underscores persistent challenges in currency management.
While the RBM did not specify the primary drivers behind the surge in damaged notes, such increases often reflect high circulation velocity, inadequate storage conditions, or the physical degradation of older series notes.
For a central bank operating within a constrained fiscal environment, rising operational expenditures on currency logistics divert resources from other monetary policy tools.
This development arrives as Malawi’s external accounts face mounting pressure.