Mmegi

After BoB forex move, banks tap their P21bn pile

Basic unit: The devaluation of the Pula has triggered inflationary effects in the economy PIC: MORERI SEJAKGOMO
Basic unit: The devaluation of the Pula has triggered inflationary effects in the economy PIC: MORERI SEJAKGOMO

Banks are sitting on P21 billion of their own foreign currency but breaking away from the cheaper, reliable Bank of Botswana supply is proving difficult. As it seeks to preserve falling official forex reserves, the BoB says commercial banks are being “disingenuous” with the rates they are charging. MBONGENI MGUNI writes

Inflation is likely to overshoot the 2.7% average originally projected by the Bank of Botswana (BoB) for this year. This is largely due to the July 11 changes to the Pula exchange framework which made access to the official foreign exchange reserves costlier for banks to access from the BoB.

Other changes which include weakening the Pula at a quicker pace this year, are playing a lesser role, as the local currency continues to drift within the ranges seen prior to the July 11 changes.

Editor's Comment
Mob justice isn't just

A young man suspected of breaking into a car was seized by residents, severely assaulted, and died in the hospital within an hour. We unreservedly condemn this mob justice. It is not a solution to crime, but a criminal offence that turns citizens into murderers.Residents are understandably angry about theft. The person who raised the alarm at 4am acted lawfully, and the neighbours who rushed to help showed community spirit. But what followed was...

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