BoB upbeat on Pula Exchange Rate Framework

The Acting Governor of Bank of Botswana (BoB) Dr Kealeboga Masalila said the exchange rate policy parameters are important for price competitiveness of local producers and service providers. It provides policy safeguards/guardrails and responses to promote industrialisation, diversification and economic growth. 

Dr Masalila reiterated this while briefing the media on the Pula Exchange Rate Framework in 2025 following the announcement of new adjustments to the framework. He said there should be producers and service providers in Botswana that earn foreign exchange, that is, sell in rands, US dollar, euro, British pounds, and so forth. 

Dr Masalila said this important in the sense that it ensure there is foreign currency available for those that import to be able to pay in the respective currencies. He said ultimately, the capability to earn foreign exchange/foreign currency, and the demand for imports, determine where you can place the value of the Pula, if not determined by the market. 

“Hitherto, diamond exports have been doing the heavy lifting of availing foreign exchange currency for imports. This appears to have moderated and subject to large fluctuations, hence the need to incentivise and promote other exports of Botswana products and services,” said Dr Masalila. 

Furthermore, Dr Masalila said BOB have since 2005 done away with occasional discrete devaluations and revaluations of the Pula; so, there has been no devaluation this time. 

He added that indeed, there has been no noticeable change in the exchange rate of the Pula against any currency between 31st December and today; a devaluation would immediately show up as a significant change in the exchange rate. 

He also said the institutional and macroeconomic policy setting and frameworks in Botswana are set up to be transparent and engender accountability. 

“We must be held accountable based on a clear understanding, by our stakeholders, of what we are doing and intend to achieve,” he said, 

Dr Masalila further explained that this means that BoB policy frameworks, the respective constituent elements and objectives should be well-understood and appreciated by the bank stakeholders, even if perspectives may differ or there are arguments against them.