Bank of Botswana

Sub-region: 



Governor 

 Mr. Moses Dinekere Pelaelo 

Headquarters Gaborone, Botswana
Established 1975
Currency Pula - BWP (ISO Code)
Website www.bob.bw

 

The establishment of the Bank of Botswana followed a decision to withdraw from the Rand Monetary Area (RMA) under which the South African rand had been the legal currency in Botswana since independence in 1966. Anticipating that negotiations for a new RMA agreement that was more favourable to the smaller members (Botswana, Lesotho, and Swaziland) would be problematic, in 1973 Sir Seretse Khama, the President of Botswana, appointed a Monetary Preparatory Commission. The commission was chaired by Mr H.C.L. Hermans, then the Permanent Secretary, Ministry of Finance and Development Planning. The decision to withdraw from the RMA was announced by President Khama in September 1974.

This was despite advice against such a move, including from the International Monetary Fund (IMF), which stressed the vulnerabilities faced by a small, open economy that could not easily afford to maintain reserves sufficient to counter economic and financial volatilities. Nonetheless, the authorities believed that such costs were outweighed by the expected benefits to national development of expanding the range of domestic financial institutions and instruments. Ultimately, the decision to withdraw from the RMA was due not so much to the difficulties in the negotiations (which were successfully concluded between the other members in December 1974) but to the opportunity it provided to pursue independent economic strategies that were already constrained both by the heavy dependency on aid and membership of the Southern African Customs Union (SACU).

In April 1975, the Bank of Botswana and Financial Institutions bills were passed to legislate, respectively, for the establishment of a central bank and the framework to govern financial institutions that would fall under its supervision. The Bank of Botswana was formally established in July 1975, with Mr Hermans as the first Governor.

The first two years were a period of intensive institution building. As well as recruiting staff and securing premises, having decided to leave the RMA it was essential for the Botswana authorities to address and resolve a number of policy issues related to the introduction of a national currency and the establishment of a central bank, including the existing commercial banks that were now locally incorporated. The four most immediate of these issues concerned the characteristics of the new national currency, the exchange rate regime, domestic interest rates and the development and supervision of domestic financial institutions.

The Bank launched the national currency, the Pula, on August 23, 1976 (Pula day), to replace the rand. The rand exchanged for the Pula was credited to Botswana by the South African Reserve Bank, forming the basis of the country's foreign exchange reserves.

Mission
The mission of the Bank of Botswana is to contribute to the sound economic and financial well-being of the country. The Bank seeks to promote and maintain:

  • monetary stability;
  • a safe, sound and stable financial system;
  • an efficient payments mechanism;
  • public confidence in the national currency;
  • sound international financial relations;

and to provide:

  • efficient banking services to its various clients; and
  • sound economic and financial advice to Government.

Objectives
As set out in the Bank of Botswana Act (Cap 55:01, section 4), the Bank has the following principal objectives:

  • (a)first and foremost to promote and maintain monetary stability, an efficient payments mechanism and the liquidity, solvency and proper functioning of a soundly based monetary, credit and financial system in Botswana;
  • (b)secondly, in so far as it is not inconsistent with the objectives set out in paragraph (a), to foster monetary, credit and financial conditions conducive to the orderly, balanced and sustained economic development of Botswana; and
  • (c)thirdly, to assist insofar as it is not inconsistent with the objectives as set out in paragraphs (a) and (b), in the attainment of national economic development goals.

 

Brief presentation of the country

This document contains Botswana’s economy in brief. Open the document below to get more information …

AttachmentSize
Microsoft Office document icon Botswana’s Economic Brief88.5 KB
Central Banks: 

The national currency - The Pula

The Bank of Botswana has been issuing currency (notes and coin) since August 1976 when the national currency, the Pula, was first introduced. As set out in of the Bank of Botswana Act (Cap 55:01, Part V), the Bank has responsibility for the issue and circulation of currency in Botswana. Thus, a central objective of the Bank is to provide a secure supply of national currency to adequately meet the needs of a growing economy. This includes maintaining at all times public confidence in the value and safety of currency. This obligation is discharged primarily by the Banking and Currency Department through supervising the production and distribution of new currency as well as the withdrawal of old notes an coins. More broadly, confidence in the currency is supported by the effective implementation of monetary policy in order to control inflation and maintain purchasing power.

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Central Banks: 

Statistics

Real Sector Statistics

The spreadsheet above contains the following tables:

National Output

  • 1.1 Gross Domestic Product by Type of Expenditure - Current Prices
  • 1.2 Gross Domestic Product by Type of Expenditure - Constant 1993/94 Prices
  • 1.3 Gross Domestic Product by Type of Economic Activity - Current Prices
  • 1.4 Gross Domestic Product by Type of Economic Activity - Constant 1993/94 Prices

Prices

  • 2.1 Cost of Living Index by Location (September 2006 = 100.0)
  • 2.2 Cost of Living Index (September 2006 = 100.0)
  • 2.3 Annual Inflation
  • 2.4 Cost of Living Index by Commodity Group (September 2006 = 100.0)
  • 2.5 Cost of Living Index: Tradeability Analysis (September 2006 = 100.0)

Public Finance Information

This section contains the following tables:

  • 7.1 Government: Budget Summary
  • 7.2 Government Revenue
  • 7.3 Government Expenditure
  • 7.4 Government Lending: Outstanding Loans (PDSF, RSF and DF)
  • 7.5 Government: Medium and Long Term External Government Guaranteed Debt Outstanding

Money and Credit Information

This section contains the following tables:

Banking System

  • 3.1 Central Bank Survey
  • 3.2 Other Depository Corporations Survey
  • 3.3 Depository Corporations Survey
  • 3.4 Monetary Survey: Monthly Balances
  • 3.5 Monetary Survey: Year Percentage Change
  • 3.6 Monetary Survey: Year-end/Quarterly Balances
  • 3.7 Monetary Survey: Year-on-Year Percentage Change
  • 3.8 Bank of Botswana: Assets
  • 3.9 Bank of Botswana: Liabilities
  • 3.10 Notes in Circulation: by Denomination
  • 3.11 Coins in Circulation: by Denomination
  • 3.12 Commercial Banks: Assets
  • 3.13 Commercial Banks: Liabilities
  • 3.14 Commercial Banks: liquid Assets
  • 3.15 Commercial Banks: Reserves
  • 3.16 Commercial Banks: Deposits by Holder
  • 3.17 Commercial Banks: Deposits by Type
  • 3.18 Commercial Banks: Deposits by Holder (Percentage Distribution)
  • 3.19 Commercial Banks: Deposits by Type (Percentage Distribution)
  • 3.20 Commercial Banks: Loans and Advances Outstanding by Sector
  • 3.21 Commercial Banks: Outstanding Loans and Advances to Households
  • 3.22 Commercial Banks: Advances and liquid Assets Ratios
  • 3.23 Commercial Banks: Loans and Advances by Maturity
  • 3.24 Commercial Banks: Loans and Advances by Interest Rates
  • 3.25 Commercial Banks: Off-Balance Sheet Items
  • 3.26 Commercial Banks: Income and Expenses
  • 3.27 Commercial Banks: Arrears on Loans and Advances
  • 3.28 Commercial Banks: Arrears by Sector
  • 3.29 Electronic Clearing House (ECH) - Cheque Clearance and Electronic Funds Transfer (EFTS)

Money and Capital Markets

  • 4.1 Interest Rates
  • 4.2 Interest Rates: Nominal and Real
  • 4.3 Bank of Botswana Certificates: Total Outstanding
  • 4.4 Bank of Botswana Certificates: Auctions Summary
  • 4.5 Botswana Stock Exchange: Total Listings

Non-Bank Financial Institutions

  • 5.1 Merchant Banks: Assets and Liabilities
  • 5.2 Botswana Building Society: Assets and Liabilities
  • 5.3 Botswana Development Corporation Ltd: Assets and Liabilities
  • 5.4 Botswana Motor Vehicle Accident Fund: Assets and Liabilities
  • 5.5 Botswana Savings Bank: Assets and liabilities
  • 5.6 Hire Purchase Finance and Leasing Companies: Assets and Liabilities
  • 5.7 National Development Bank: Assets and Liabilities
  • 5.8 Distribution of Pension Fund Assets

External Sector
This sections contains the following tables:
  • 6.1 Balance of Payments Analysis
  • 6.2 Balnce of Payments Summary
  • 6.3 Exports: Principal Merchandise
  • 6.4 Exports: Selected Commodity Price Indices
  • 6.5 Exchange Rates: Foreign Currency Per Pula
  • 6.6 Exchange Rates: Foreign Currency Per Pula - Averages
  • 6.7 Exchange Rates: Selected Foreign Currencies Per US Dollar
  • 6.8 Exchange Rates: Selected Foreign Currencies Per US Dollar - Averages
  • 6.9 Real Exchange Rates Indices: Foreign Currency Per Pula
  • 6.10 Foreign Exchange Reserves: Selected Currencies
  • 6.11 Commercial Banks: Foreign Currency Accounts and Total Deposits
  • 6.12 Commercial Banks: Foreign Currency Deposits by Type
  • 6.13 Foreign Currencies: Sales by the Banking Sector
  • 6.14 Foreign Currencies: Purchases by the Banking Sector
  • 6.15 International Investment Position
AttachmentSize
Office spreadsheet icon Real Sector164 KB
Office spreadsheet icon Public Finance94.5 KB
Office spreadsheet icon Money and Credit817 KB
Office spreadsheet icon External Sector244.5 KB
Central Banks: 

Annual Reports

Central Banks: 

Annual Report 2006

The files below contain all information on the Annual Report of the Bank of Botswana for 2006.

Central Banks: 

Annual Report 2005

The files below contain all information on the Annual Report of the Bank of Botswana for 2005

Central Banks: 

Annual Report 2004

The files below contain all information on the Annual Report of the Bank of Botswana for 2004.

Central Banks: 

Annual Report 2003

The files below contain all information on the Annual Report of the Bank of Botswana for 2003

Central Banks: