06 Jan 2020

The President, Dr Mokgweetsi Masisi has decided to maintain the Pula basket weights at 45 per cent African Rand and 55 per cent Special Drawing Rights (SDR), at the recommendation of the Ministry of Finance and Economic Development and Bank of Botswana.

A press release from the Ministry of Finance and Economic Planning states pegging the Pula against major currencies ensures its stability and protects investments against volatile currency fluctuations.

It states that the annual review of the Pula Exchange Rate Policy Framework is undertaken by the government, with a view to maintain a stable and competitive real effective exchange rate of the Pula.

The Pula is pegged against the Rand and the SDR, which consists of the US dollar, Japanese Yen, Chinese Renminibi, the Euro and the British Pound.

In addition, a downward rate of crawl of 1.51 per cent per annum has been implemented, since the beginning of this year.

According to the press release, the rate of crawl reflects the difference between the BoB’s medium term objective and the forecast inflation for trading partner countries.

“The overall objective of the country’s exchange rate policy is to achieve and maintain the competitiveness of domestic products and services in the domestic and international markets,” concludes the press release.Ends