Yields rise as debt auction misses target again

The October 25 auction is the fourth monthly auction in a row at which the Bank of Botswana, as government’s banker, has missed the debt targets it sought to raise from the capital market.

The BoB conducts monthly auctions of short-term treasury bills as well as longer-term bonds to primary dealers who are exclusively banks. At the auctions, the dealers compete to lend to the government by offering the yields they are seeking, with the BoB deciding the 'stop-out' yield or the maximum level of interest it is willing to pay the dealers on the particular securities on offer.