BoB move triggers interest rate turmoil

The move to trim outstanding Bank of Botswana Certificates (BoBCs) has triggered a stampede for the fewer notes on the market, resulting in interest rate turmoil for both commercial banks and their depositors, BusinessWeek has established.

The Bank of Botswana (BoB) recently decided to limit outstanding BoBCs to P10 billion, citing rising interest costs and the need for banks to innovate new asset lines. The move meant commercial banks were suddenly saddled with approximately P3 billion in additional liquidity.