Pula exchange framework largely maintained
Mbongeni Mguni | Wednesday December 31, 2025 19:30
By law, authorities revise the Pula exchange rate framework twice a year, in June/July and December, basing their decision on factors such as the levels of the foreign exchange reserves, inflation in trading partner countries and others.
July changes to the framework triggered economy-wide price hikes, as the downward rate of crawl of the Pula was increased, while the margins banks pay for accessing foreign currency from the central bank were increased.
Briefing journalists, Sayed Timuno, the Finance Ministry’s secretary of macroeconomic and financial policy, said while the July revisions had reduced the reliance on the central bank for foreign exchange supply and increased interbank price discovery, there was scope for further refinement of the policy.
“Under the current symmetric margin structure, exporters receive fewer Pula per unit of foreign currency when converting proceeds, which may dampen export competitiveness and the incentive to domesticate foreign currency earnings,” he said.
Timuno said President Duma Boko had thus approved a reduction in the rate at which the central bank buys foreign currency from commercial banks, from 7.5% to three percent, while maintaining the rate at which the BoB sells foreign currency to banks at minus 7.5%.
“This adjustment will potentially enable local exporters to earn more Pula per unit of foreign currency, strengthening the incentive to convert export proceeds into Pula and increasing the supply of foreign currency,” Timuno said.
Other aspects of the exchange rate framework were maintained, with the downward rate of crawl of the Pula staying at minus 2.76% and the Pula basket currency weights remaining at 50% each to the South African Rand the Special Drawing Rights currencies.
The central bank’s Director of Research and Financial Stability, Innocent Molalapata, told Mmegi the change to the trading margins represented a refinement that would support exporters or those holding foreign currency in the economy.
“This is a refinement to the trading margins such as that, those who are mainly going to benefit are those who are going to be converting forex into Pula,” he said. “What it basically means is that, following those changes, the foreign currency that you have, when you convert it to Pula, you are going to get more than what you could get right now.”
He further explained: “In terms of those who are going to be selling or converting the Pula to the foreign currency, there's not going to be any change. “The only change that you continue to see is as a result of competition from the market, which is basically something that we had intended to see and we continue to see.”
Molalapata said unlike the July changes which had triggered price hikes in the economy, the revision made today would not have similar effects.
“This does not have an impact on the value of the Pula. “What we are used to has been symmetric margins where you have an equal distance from the midpoint both on the buy and on the sell side. “So this time around, we are trying to incentivise exporters or make it an advantage for exporters so that when they process foreign currency to Pula, they benefit more.”
The changes to the exchange rate framework take effect on January 1.