In a significant move, the government of Botswana released an official press statement regarding the Pula exchange rate for the upcoming year. The statement, shared through the official government Twitter account, highlights crucial decisions that will shape the economic landscape in 2024.
The release begins by referencing Section 21 of the Bank of Botswana Act, emphasizing the legal framework underpinning the determination of the Pula’s external value. According to the statement, this determination is set to be made by His Excellency the President based on recommendations from the Honourable Minister of Finance, following consultations with the Bank of Botswana.
One of the pivotal aspects covered in the announcement is the regular review of the Pula basket of currencies and their associated weights by the Ministry of Finance, in collaboration with the Bank of Botswana. The objective of these reviews is to ensure the maintenance of a stable and competitive real effective exchange rate for the Pula. The Pula basket includes the South African rand and the International Monetary Fund’s Special Drawing Rights (SDR), comprising the US Dollar, Japanese Yen, Chinese Renminbi, Euro, and British Pound.
𝗣𝗨𝗟𝗔 𝗘𝗫𝗖𝗛𝗔𝗡𝗚𝗘 𝗥𝗔𝗧𝗘 𝗜𝗡 𝟮𝟬𝟮𝟰 pic.twitter.com/dON2dYx0td
— Botswana Government (@BWGovernment) December 28, 2023
The latest review, conducted in December 2023, has resulted in the approval by His Excellency the President to maintain the Pula basket weights at 45 percent South African rand and 55 percent SDR. Additionally, a noteworthy decision has been taken regarding the downward rate of crawl, set at 1.51 percent per annum for the year 2024. This decision is explained in the context of favorable inflation differentials that work in favor of Botswana.
The press release concludes with a signature from Boniface G. Mphetlhe, the Acting Permanent Secretary, reaffirming the government’s commitment to maintaining the Pula’s robust and competitive position in the global exchange market. The decision-making process is depicted as a careful consideration of both regional economic dynamics and international factors.
This official communication marks a crucial step in providing transparency and insight into Botswana’s economic strategies, fostering confidence among stakeholders and the public. The government’s use of digital platforms like Twitter for such announcements showcases a commitment to effective and timely communication with the citizens and the international community.