Mmegi

Falling reserves raise fears of pula framework change

Under pressure: The foreign exchange reserves ‘defend’ the pula PIC: MORERI SEJAKGOMO
Under pressure: The foreign exchange reserves ‘defend’ the pula PIC: MORERI SEJAKGOMO

Market watchers have warned that the country may be forced to adjust the crawling peg, the current exchange rate system used to manage the pula, as foreign reserves continue to plummet due to the prolonged diamond downturn.

The countries foreign exchange reserves reached $3.5 billion in April in comparison to record highs of $10.3 billion in 2008. This steep downfall has meant that the country’s fiscal planners have less wiggle room to sell the pula and buy other currencies in an attempt to defend the value of the pula and maintain constant supply of foreign currency to banks and traders.

In their second quarter economic review, researchers at Econsult, a local firm led by prominent economist Keith Jefferis, warned that the trajectory of the foreign reserves suggested a review of the crawling peg system that is currently being used to give the pula nominal value.

Editor's Comment
Human rights are sacred

It highlights the need to protect rights such as access to clean water, education, healthcare and freedom of expression.President Duma Boko, rightly honours past interventions from securing a dignified burial for Gaoberekwe Pitseng in the CKGR to promoting linguistic inclusion. Yet, they also expose a critical truth, that a nation cannot sustainably protect its people through ad hoc acts of compassion alone.It is time for both government and the...

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