BoB expects lower bond yields as PFR 2 inflows strengthen

Capital central: The BoB’s activities in the capital market raise funds for government and also set the benchmark for other issuers and investors PIC: MORERI SEJAKGOMO
Capital central: The BoB’s activities in the capital market raise funds for government and also set the benchmark for other issuers and investors PIC: MORERI SEJAKGOMO

The Bank of Botswana (BoB) expects bond yields to begin declining next year as more capital flows into the local market due to the stepping up of the pension fund repatriation exercise.

Under changes to the Retirement Funds Act, local pension funds have until December 2027 to invest a minimum of 50% of their assets domestically, a figure that as at August translated to P16.3 billion being repatriated from offshore. Known formally as the Pension Fund Rule 2 or PFR 2, the Non-Bank Financial Institutions Regulatory Authority (NBFIRA) statute previously required pension funds to invest at least 30% of their assets locally.

BoB’s financial markets department director, Lesego Moseki, told BusinessWeek that the repatriation of pension funds would lead to increased liquidity in the local market, helping ease the yields paid out by the central bank on its capital market activities.


Editor's Comment
Government’s efforts commendable!

Since the news broke, the government made sure to work hand in hand with the South African government to assist the families of the victims. The two countries came together to help the families identify the bodies of their loved ones through DNA testing. The government also announced that they would assist families with food for mourners before the funerals.Even though the deceased persons were mostly residents of Molepolole, the government...

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