Today’s government bond and t-bill auction, conducted by the Bank of Botswana, saw a further decline in interest rates. The 3-month t-bill rate fell to 8.14%, from a peak of 11.87% in April. There were similar falls in the 6 and 12-month t-bill rates. However, yields on longer-term government bonds only came down by much smaller amounts.

The change reflects much improved liquidity in the banking system, and the fact that government’s overall borrowing appetite is in line with the path laid out in the 2025/26 Annual Borrowing Programme. Government has benefited from a huge P7.3 billion windfall dividend received from the Bank of Botswana earlier in the year, which has helped it to pay off arrears (in turn boosting market liquidity)