Foreign reserves dip to four-year low
Mbongeni Mguni | Thursday May 17, 2018 13:45
The last time foreign reserves dipped below P71 billion was in March 2014 when they were pegged at P70.1 billion. Bank of Botswana figures released this week show that the reserves fell from P72.2 billion in February due largely to movements in the transaction balances tranche, a subcategory of the reserves catering for short term foreign currency needs in the local market.
The level of the transaction balances tranche fell by 33% in March, one of its steepest declines in recent times.
At their latest levels and using an average monthly import bill of P5 billion, the current level of foreign reserves is equivalent to approximately 14 months of import cover.
According to the reserve guidelines, the central bank is required to maintain at least six months of import cover in the foreign reserves.
The latest figure for the reserves continues a rollercoaster six-months within which the levels were pegged at P82 billion in October 2017, dropping to P73.7 billion in December and then rising again to P76 billion in January, before the latest record drop.