Botswana’s currency, the Pula, still holds strong as a store of value and a medium of exchange, according to Finance Minister Ndaba Gaolathe, who recently explained in Parliament how the government is adjusting Botswana’s currency system to match the country’s changing economy.
Gaolathe said this has also been helped by low inflation, because the Bank of Botswana (BoB) has contained prices from rising too fast. The government has increased the pace at which the Pula will weaken in the second half of 2025, moving from -1.51% to -2.76%.
Gaolathe said this is meant to slowly fix the Pula’s high value, which has made local goods expensive in other countries. Botswana wants to help local producers sell more to the world by making it cheaper for exporters, while still keeping prices at home from rising too fast. The goal is to keep inflation between 3 and 6%.
Keeping the Pula too strong was also draining Botswana’s savings (called foreign reserves) and the government worried those savings might run out.
Gaolathe warned that with less foreign money coming in, the country’s reserves are shrinking faster than before. Yet the reserves are key to the stability of the Pula.
He said this puts the ability of the Bank of Botswana to continue defending the value of the Pula in question.
“Bank of Botswana had to dip into the foreign reserves, selling dollars and euros to buy Pula and stop its value from falling too quickly.”
To protect Botswana’s foreign savings, the government made changes to stop the country’s reserves from falling too fast. The Bank of Botswana has made it more expensive for banks to buy foreign currency from them. Banks have to pay up to 7% more than before.
On top of that, the Bank of Botswana now only sells foreign currency in larger amounts, at least $5 million.
Finance officials say this is meant to stop banks from relying too much on the central bank for foreign currency. Instead, they want banks to find their own sources, amongst themselves.
This has paid off, according to Gaolathe:
Before the changes:
- In 2024, the Bank of Botswana sold P56.6 billion worth of foreign currency to commercial banks.
- This worked out to about P4.7 billion per month or P1.2 billion per week.
After the changes in July 2025:
- Commercial banks now buy much less foreign currency from the Bank of Botswana.
- Weekly purchases have dropped to about P290 million.
- This means the Bank is saving more of its foreign reserves, just as the government wanted.
“This decline reflects the increased cost of accessing foreign exchange from the central bank,” .
Gaolathe said
