Though government bonds are usually considered risk free, capital markets players have been observing the country's deteriorating financial position, marked by significant decline in government investment account and the ever-increasing budget deficits. Recently, top credit ratings agency Moody's downgraded Botswana's long-term local and foreign currency issuer ratings, bringing it close to junk status. The country's ability to repay debts was dropped a notch down from grade A2 to A3, reflecting the deterioration in fiscal strength due to government financing the 2020 budget deficit mainly by drawing down fiscal reserves and to a lesser extent by issuing domestic debt.