FAQs

Public complaints about the standard and cost of banking services have persisted over many years, and are a matter of great concern to the Bank. As a result, the Bank is in regular dialogue with the commercial banks over the need to continually improve service delivery to customers. The Bank has authority under the Bank of Botswana Act (section 41) to determine the level of service fees and commissions charged by banks. However, the preferred approach is to encourage effective competition among the banks, including through encouraging new banks to enter the market, provided they satisfy licensing requirements. This approach has met with significant success as banks have introduced a range to new products and rationalized fee structures. Consumers are also encouraged to compare bank products and charges and change banks if they are dissatisfied. However, it also should be recognized that financial stability depends in large part on banks remaining profitable and, for this, they must be able to charge realistic fees for their services. (See also financial institutions and consumer protection.)

The Bank implements the exchange rate policy and must be consulted on any proposed changes in the policy. However, the policy is determined by His Excellency, the President of Botswana on the basis of recommendations made by the Minister of Finance and Development planning. (See also Exchange rate policy.)

No. The Bank sets a quantitative objective range for inflation in the medium term that guides its monetary policy decisions. However, this does not meet all the elements of inflation targeting. These typically include a more explicit framework and price stability mandate to ensure clarity and accountability. In addition, the central bank must have full operational independence, including giving precedence to the inflation target over other objectives such as a target for the exchange rate. While these conditions are not fully met at present in Botswana, it is judged that the current framework remains appropriate given the prevailing circumstances. (See also basics of monetary policy and monetary policy framework.)

High and, in particular, volatile inflation disrupts economic development and reduces long-term growth. It also reduces welfare, especially for poorer people who are more vulnerable to the negative effects of rising prices. Inflation is essentially a monetary phenomenon that is best controlled through appropriate monetary policy, which in Botswana, as elsewhere, is the responsibility of the central bank. (See also basics of monetary policy.)

See vision, mission and objectives and history of the Bank of Botswana.

The Bank is 100 percent owned by the Government of Botswana.