29 Jun 2026

Botswana’s foreign exchange reserves declined by P0.7 billion, falling from P48.1 billion in December 2024 to P47.4 billion in December 2025, equivalent to 5.5 months of import cover.

Briefing the media recently, Bank of Botswana Chief Financial Officer, Mr Daniel Loeto, said the reduction was largely driven by elevated outflows that exceeded inflows during the period.

“The increase in outflows were driven by the need to meet import payments like sales to commercial banks to meet customer demand and possibly for their own account and foreign exchange requirements by the government,” he said. 

Mr Loeto said inflows were mainly supported by Southern African Customs Union (SACU) receipts, while diamond revenues remained subdued, although they improved slightly compared to 2024. 

He added that government also resorted to external borrowing to support the budget.

He further stated that withdrawals were made from the long-term Pula Fund to replenish balances in the Liquidity Portfolio during the year. Consequently, reserves held in the Pula Fund declined from P37.4 billion in December 2024 to P27.9 billion in December 2025.

According to Mr Loeto, the overall level of foreign exchange reserves decreased marginally by about 1.5 per cent, mainly due to adjustments to exchange rate parameters, foreign loan transactions and continued provision of foreign exchange to support the domestic economy during 2025.

“The marginal decrease in foreign exchange reserves was mainly due to the net effect of the Bank continuing to provide foreign exchange to the economy and government external borrowing in none-pula dominated currencies,” he said.

Despite the decline in reserves, investment portfolios performed strongly during the year. Mr Loeto said the Liquidity Portfolio and the Pula Fund generated a combined market return of 11.3 per cent in 2025, reflecting robust global financial market performance.

The Pula Fund, which is invested in higher-return assets, recorded a market gain of 14.3 per cent, driven mainly by strong equity market performance. 

Equity portfolios within the fund returned 23.2 per cent, while bond portfolios posted gains of 6 per cent.

Mr Loeto also reported an increase in administration costs, which rose to just over P1 billion in 2025 from P971.7 million in 2024.

“This is an increase of P98 million and of that increase, P74.2 million was as a result of the bank restocking the P20 note that was received in the course of 2025, as well as the P50 commemorative note,” he said.

Regarding the Bank’s balance sheet, Mr Loeto said total assets stood at P56.6 billion at the end of 2025, compared to P54.2 billion in 2024. ENDS