BoB raises P2.8bn for govt as yields slide
Mbongeni Mguni | Wednesday July 8, 2026 14:35
The central bank raised P800 million of the P2.8 billion from the longer maturing bonds, while the short-term Treasury Bills continued their dominance of the monthly auctions.
According to Kgori Capital trend analysis, yields fell across the spectrum at the June 26 auction, with the key three month Treasury Bill dropping by 104 basis points, while the six-month fell 95 basis points. Yields also fell on the bonds, most notably the five year paper which dropped ten basis points.
The trend means lowering borrowing costs for government and is especially important in the Treasury Bills which the BoB has primarily been using to refinance or “roll over” government’s debt. Of the P2.8 billion raised, bonds accounted for 28 percent, one of the highest amounts secured in recent months on the longer end of the spectrum.
Bank of Botswana acting director of Financial Markets, Nenguba Chakalisa, said the central bank was in talks with the capital market to resolve the trend where much of government’s debt is raised from the short-term notes. He said the bank was pleased to note more activity on the longer end of the spectrum, particularly the bond maturing in 2050, which is the longest-maturing in the market. Activity in the short-term notes is largely driven by commercial banks moving their liquidity positions around, while the long-term notes are favoured by pension funds for asset-liability matching purposes.
However, the dominance of the short term over the long term has also been linked to concerns in the market over government’s long-term credit worthiness.