Thursday, May 23, 2024

Pula appreciates against the Rand in June

The local currency, the Pula appreciated against the rand (0.8 percent) while depreciating against pound (2.3 percent), euro (1.0 percent), yen (0.9 percent) and the USD (0.7 percent) in June. For the week that has just ended, Bank of Botswana figures show that the Pula retreated against the dollar, euro and the pound but gained ground relative to the rand and the yen.

The local unit shed half a percent and 0.4 percent to the dollar and the euro, in that respective order, but gained 0.4 percent to the rand for the week under review. At the same time, the local currency shed 1.6 percent and 5.5 percent to the greenback and the pound for the year thus far, however relative to the rand it has strengthened by 1.3 percent. On an annual basis (twelve months to June 2014), the Pula depreciated against the pound (12.6 percent), euro (6.6 percent), US dollar (2.4 percent) while appreciating against the rand (4.0 percent) and the yen (0.2 percent).

Earlier this year, Finance and Development Planning Minister, Kenneth Matambo maintained the rate of crawl of the local currency against the weight of the currencies in the basket. The Pula basket comprises 55 percent South African rand and 45 percent Special Drawing Right, while the rate of crawl is minus 0.16 percent per annum. Last year the government disclosed both the rate of crawl of the Pula and the weight of the currencies in the basket after close to a decade of non-disclosure. The move, according to economic commentators, was made in a bid to foster transparency of Botswana’s exchange rate mechanism.

The Central Bank said in statement circulated earlier this year that, “the parameters of the crawling band exchange rate mechanism for 2013 are being maintained, as they have continued to contribute to the stability of the Real Effective Exchange Rate, which is critical for economic diversification and job creation.”


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