{
  "title": "BOTSWANA: Domestic Bond Market Development",
  "publication": "High-Level Summary Technical Assistance Reports, March 17, 2023",
  "sourceUrl": "https://www.imf.org/en/publications/high-level-summary-technical-assistance-reports/issues/2023/03/20/botswana-domestic-bond-market-development-531052",
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  "summary": "This paper discusses high-level summery technical assistance report that focuses on Botswana’s domestic bond market development.",
  "sections": [
    {
      "heading": "Executive summary",
      "content": "- The report is a high-level summary technical assistance report focused on Botswana’s domestic bond market development.\n- The implementation of a new monetary policy framework to support the Bank of Botswana’s (BoB) inflation targeting regime is described as a welcome development for domestic debt market development.\n- There is significant scope to make progress on the authorities’ goal to shift funding from nonconcessional external borrowing to the domestic bond market.\n- Measures to develop the domestic debt market are likely to result temporarily in higher funding costs, but this is framed as a necessary investment that will likely be counterbalanced by lower financing costs in the medium-to-long term."
    },
    {
      "heading": "Key findings and analysis",
      "content": "- Coordination between debt management and liquidity management should be enhanced to facilitate the expansion of the domestic debt market.\n- Material improvements in the secondary market will take more time to bear fruit; efforts to improve the secondary market should be sequenced after foundational building blocks are operating more efficiently.\n- The new monetary policy framework supporting the BoB’s inflation targeting regime is an important enabling factor for domestic debt market development.\n- Shifting funding away from nonconcessional external borrowing toward the domestic bond market is a central policy objective highlighted by the authorities."
    },
    {
      "heading": "Policy recommendations and sequencing",
      "content": "- Enhance coordination between debt management and liquidity management to support market development.\n- Prioritize foundational market infrastructure and operational efficiency before intensifying efforts to develop the secondary market.\n- Accept temporary increases in funding costs as part of the investment required to develop the domestic debt market, with the expectation of lower financing costs over the medium-to-long term."
    },
    {
      "heading": "Observations on market implications",
      "content": "- The report emphasizes that material secondary market improvements are a longer-term outcome and should follow improvements in more foundational market elements.\n- The transition toward domestic financing from external nonconcessional borrowing is presented as feasible with appropriate policy and operational adjustments.\n\nSource: BOTSWANA: Domestic Bond Market Development, High-Level Summary Technical Assistance Report No. 2023/002 (March 17, 2023).\n\n---\n\n Content in this bundle\n\n- High-Level Summary Technical Assistance Report — Botswana Domestic Bond Market Development\n  - High-Level Summary Technical Assistance Report — Botswana Domestic Bond Market Development (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - High-Level Summary Technical Assistance Report — Botswana Domestic Bond Market Development (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/high-level-summary-technical-assistance-reports/issues/2023/03/20/botswana-domestic-bond-market-development-531052"
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    "Authors: Trevor A Lessard, Laszlo Buzas, Bill Northfield",
    "Published: March 17, 2023",
    "Series: High-Level Summary Technical Assistance Reports",
    "DOI: https://doi.org/10.5089/9798400235467.029",
    "The report is a high-level summary technical assistance report focused on Botswana’s domestic bond market development.",
    "The implementation of a new monetary policy framework to support the Bank of Botswana’s (BoB) inflation targeting regime is described as a welcome development for domestic debt market development.",
    "There is significant scope to make progress on the authorities’ goal to shift funding from nonconcessional external borrowing to the domestic bond market.",
    "Measures to develop the domestic debt market are likely to result temporarily in higher funding costs, but this is framed as a necessary investment that will likely be counterbalanced by lower financing costs in the medium-to-long term.",
    "Coordination between debt management and liquidity management should be enhanced to facilitate the expansion of the domestic debt market.",
    "Material improvements in the secondary market will take more time to bear fruit; efforts to improve the secondary market should be sequenced after foundational building blocks are operating more efficiently.",
    "The new monetary policy framework supporting the BoB’s inflation targeting regime is an important enabling factor for domestic debt market development.",
    "Shifting funding away from nonconcessional external borrowing toward the domestic bond market is a central policy objective highlighted by the authorities.",
    "Enhance coordination between debt management and liquidity management to support market development.",
    "Prioritize foundational market infrastructure and operational efficiency before intensifying efforts to develop the secondary market.",
    "Accept temporary increases in funding costs as part of the investment required to develop the domestic debt market, with the expectation of lower financing costs over the medium-to-long term.",
    "The report emphasizes that material secondary market improvements are a longer-term outcome and should follow improvements in more foundational market elements.",
    "The transition toward domestic financing from external nonconcessional borrowing is presented as feasible with appropriate policy and operational adjustments.",
    "**High-Level Summary Technical Assistance Report — Botswana Domestic Bond Market Development**"
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