The Bank of Botswana says it would be cumbersome to make the deliberations of the Monitory Policy Committee public as they are “fairly complicated and technical”.
This notwithstanding, the Bank says that there could be merit in having the deliberations made public but warns that could create a fertile ground for competing vested interest to the detriment of the country.
The Bank governor, Linah Mohohlo, and her team impressed upon reporters during a question and answer session immediately after her launch of the annual Monetary Policy Statement on Friday that the committee decisions are “fairly intense” yet they are taken by consensus.
“International best practice is such that Monitory Policy Committee debates are not conducted publicly. Perhaps the nation should be asking us to disseminate information on the monetary policy more regularly. There are some entities that have vested interest in the monetary policy and as a bank we should not be swayed by those as it has to employ professionalism,” said Mohohlo.
Asked whether it would make sense to have BOB manage the Public Officers Pension Fund, the bank said it could but it is not desirable to do so as that would be tantamount to managing a private bank.
The Bank has denied that it does not make regular public briefs about the state of the country’s reserves saying they are gazetted monthly.
The reserves dwindled by about 12 percent in the 12 months to December 2010 to P50.8 billion. BoB says this is equivalent to approximately 17 months of import cover.
“The reserves have provided a cushion to fall back on in times of government revenue constraints,” Mohohlo said, launching the MPS.
The Bank says as a related matter, it facilitates and oversees the orderly operations of the domestic foreign exchange market to ensure that residents conduct their international financial and other transactions without hindrance.
“Equally important, the management of the exchange rate promotes export competitiveness through the stabilisation of the real effective exchange rate. This is done by crawling the nominal effective exchange rate,” the governor said.
Mohohlo said the effective transmission of the signals of monetary policy to the rest of the economy depends on the efficiency of payments and settlements and a soundly managed financial sector.
“For this reason, the Bank is a regulator, supervisor and lender of last resort for banks, in the interest of customers and for the benefit of the economy as a whole. Moreover, in close collaboration with the Non-Bank Financial Institutions Regulatory Authority, the Bank ensures the stability of the broader financial sector,” said the governor.
The MPC consists of the governor as chair, the deputy governors, Banking Services general manager, director of research and other senior members of staff at the Bank.
