30 July 2025
Despite recent depreciation, Botswana’s Pula remains the fifth strongest currency in Africa, according to Business Insider Africa’s July 2025 ranking.
Botswana maintains a crawling peg regime, managing the Pula against a currency basket split equally between the South African Rand and Special Drawing Rights (SDR) currencies. In December 2024, the Bank of Botswana adjusted the basket weights to 50-50, aiming to stabilise volatility and improve export competitiveness.
Authorities reaffirmed this arrangement in July, maintaining the devaluation path with a -2.76 percent annual crawl. Vice President Ndaba Gaolathe defended the strategy, saying,
“The Pula is five times more powerful than it should be, reflecting our economic stability and prudent management.”
The currency trails the Tunisian Dinar, Libyan Dinar, Moroccan Dirham, and Ghanaian Cedi in strength but outperforms many peers across the continent. Botswana’s strong credit reputation stems from consistent diamond exports, low corruption, and conservative fiscal policies.
Still, pressures are mounting. Falling diamond revenues and declining foreign reserves—now covering just over six months of imports—forced authorities to devalue the Pula earlier this year.
“A weaker Pula makes our exports more competitive and reduces reliance on imports,” said Acting Secretary for Macro-Economic Policy, Dr. Sayed Timuno.
“It’s a necessary step in a difficult environment.”
With biannual exchange rate reviews and a commitment to gradual adjustment, Botswana continues to position the Pula as a model for small economies navigating global headwinds. Through the crawling peg system, the central bank allows gradual Pula exchange adjustments, helping avoid sharp volatility.
Source: https://shorturl.at/awffP
