GABORONE, March 20 (Xinhua) -- Botswanan Minister of Finance Peggy Serame assured parliament Tuesday that she would continue managing the public debt portfolio in the most prudent manner, as guided by legislation.

She made the remarks while urging to increase the ceiling for the government bond issuance program from the current 30 billion pulas (about 2.19 billion U.S. dollars) limit to 55 billion pulas.

"The increase to 55 billion would still leave the country's public debt exposure within the statutory limit of 40 percent of GDP. Currently, total public debt including guarantees is 20.59 percent of GDP. This consists of external debt (including guaranteed external debt) to GDP of 9.54 percent and domestic debt (including guaranteed domestic debt) at 11.05 percent of GDP," Serame said. "However, there are several risks associated with the bond ceiling increment, such as interest rate risk, refinancing risk, as well as inflation risk."

Meanwhile, the increase is expected to facilitate the introduction of diverse debt instruments, particularly inflation-linked bonds, as a further step toward enhancing the depth of the capital market. "The introduction of inflation-linked bonds will provide an effective instrument for fund managers in the management of their portfolios, by providing a hedge against inflation at longer maturities," she added. Enditem

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