The Malawi government has entered the final stage of restructuring its debt with domestic creditors, according to reports from The Times Group Malawi.
Authorities are currently conducting stress tests to assess the potential impact of the restructuring on the local financial system and bondholders.
The move comes as the Treasury shifts its borrowing strategy, increasing reliance on shorter-term instruments.
Recent data indicates a pivot toward Treasury bills and notes in the first quarter of the 2026-27 fiscal year, signaling a recalibration of liquidity management amid fiscal pressures.
Stress testing is a critical step in sovereign debt restructurings involving domestic holders, as it helps policymakers determine the resilience of local banks and financial institutions that often hold significant portions of government debt.
The outcome of these tests will likely influence the terms and timeline of the final agreement.