At the November 25 auction, three of the four notes offered by the Bank of Botswana (BoB) to bidders recorded increases in their stop yields of just five basis points or less. However, the yield on the six-month treasury bill rose by 37 basis points.
The BoB, as government’s banker, conducts monthly auctions of short-term treasury bills as well as medium and 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.
