BoB targets P3.1bn for govt
Mbongeni Mguni | Wednesday August 19, 2026 15:45
On August 28, the central bank will offer the three- and six-month Treasury Bills seeking P2.5 billion, as well as three long-term bonds looking for P600 million. In general, the central bank has been using the shorter-maturing TBs to refinance existing debt, whilst the longer bonds have been the source of 'fresh' funding for government.
In the past few auctions, the BoB has not only hit the target of debt it has been seeking for government, but has also seen yields drop, meaning lower borrowing costs for government. The latest round of borrowing comes as more positive signals emerge from fiscal authorities that green shoots of stabilisation are being seen in the budget and the broader economy.
The Finance ministry is expected to issue the midterm budget review statement in October, updating the projected deficit for this financial year, as well as refining growth figures. The stabilisation in the fiscus has largely been due to an improvement in diamond sales, as well as a windfall P7 billion dividend paid to government by the central bank.
Both developments have also aided liquidity in the financial markets, which in turn has helped reduce pressure on government’s borrowing costs.