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BoB releases P2bn to banks as govt cash crunch spills over

Friday, December 06, 2024 | 2030 Views |

Taking action: Dekop PIC: PHATSIMO KAPENG

The Bank of Botswana is allowing local banks access to about P2 billion of their own cash held in reserve, to alleviate a liquidity crisis caused by the sharp drop in cash inflows from the banks’ biggest customers – the government and Debswana.

From December 11, the Primary Reserve Ratio or PRR, which is a proportion of deposits banks are required to keep at the BoB in order to manage liquidity or cash flows, will be reduced from a rate of 2.5% to zero.

The move will allow banks to have access to an additional P2.1 billion for lending activities, as a liquidity crunch first noted as far back as May, deepens.

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