Liquidity squeeze halves BoB�s interest expenses

Masalila.PIC MORERI SEJAKGOMO
Masalila.PIC MORERI SEJAKGOMO

The Bank of Botswana (BoB) last year cut down its interest expenses by almost 50 percent as the liquidity-starved commercial banks ran short of funds to invest in the Bank of Botswana Certificates (BoBCs).

Due to a prolonged period of rapid credit growth, which was ushered in by the central bank’s cap on BoBCs, commercial banks last year found themselves short of loanable funds with their total investments in the mopping instruments often falling below the “tolerable” cap.

As part of its open market operations, the BoB regularly auctions BoBCs to mop up excess liquidity on the money market, thus managing interest rates and other trends. For banks, the BoBCs represented regular, risk-free assets in which to invest deposits held and earn tidy returns.

Editor's Comment
Congratulations Anicia Gaothuse!

The contest had 10 beautiful young girls as finalists and unfortunately only one could wear the crown.The judges picked Anicia Gaothuse. To all those who feel their contestant should have won ahead of Anicia for whatever reason, hardly; the judges found Anicia to be the best among the best, so desist from disrespecting our newly crowned queen on social media or anywhere else, for that matter! Each of the 10 beautiful young women had supporters...

Have a Story? Send Us a tip
arrow up