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Exchange Rate - Chronology

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DATE

ACTION

COMMENTS

1966–1976

Member of the RMA

No independent exchange rate or monetary policy.

August 1976

Pula introduced and is pegged to the USD, at P1=USD1.

The rand is also pegged to the US dollar at the same rate; hence P1=R1.

April 1977

5 percent revaluation of the Pula; P1=USD1.2075=R1.05

Anti-inflationary measure in response to imported inflation.

January 1979

Introduction of a floating rand exchange rate in South Africa.

The rand appreciates against the US dollar as gold price rises; this led to an appreciation of the rand against the Pula.

June 1980

The Pula basket is introduced,  consisting of the SDR and rand in euqual weights. 

This was aimed at reducing the volatility of the Pula/rand exchange rate.

November 1980

5 percent revaluation of the Pula

Anti-inflation measure.

January 1981

Gold price in the world market drops.

There is a rapid depreciation of the rand as South Africa’s export earnings collapse.

May 1982

10 percent devaluation of the Pula.

Stabilisation measures in response to balance of payments crisis.

February 1984

Foreign debt standstill for South Africa and run on the rand.

There is a rapid depreciation of the Pula against the dollar as the rand continues to deteriorate, and similarly rapdi appreciation of the pula against the rand.

July 1984

5 percent devaluation of  Pula

Competitiveness measures due to the continued appreciation of the Pula against the rand.

August 1984

Rand weight is restored at 50 percent; after it had fallen to 37 percent by the end of July 1984.

To reduce the drift of the Pula from the rand.

January 1985

15 percent Pula devaluation

Competitiveness measure.

January 1986

New Pula basket is introduced with the rand weight increased to 65 percent.

This was due to the continued depreciation of the rand against the dollar, which turn meant that Pula was appreciating against the rand.

June 1989

5 percent Pula revaluation

Anti-inflation measure.

August 1990

5 percent Pula devaluation

Competitiveness measure.

August 1991

5 percent Pula devaluation

Competitiveness measure.

June 1994

Technical adjustment and removal of Zimbabwe dollar from the basket.

To reflect changes in trade patterns, and aimed at maintaining competitiveness through real exchange rate stability

February 2004

7.5 percent Pula devaluation

Competitiveness measure.

May 2005

12 percent Pula devaluation

Competitiveness measure.

May 2005

Adoption of the crawling band mechanism

To avoid discrete adjustments of the exchange rate while maintining stability in the reasl effective exchange rate.

May 2005

Increase of the Bank of Botswana's trading margins from +/-0.125 percent around the centre rate to +/-0.5 percent.

Increase inter-bank trading in the foreign exchange market.

March 2009

Reduce the margins from +/-0.5 percent around the centre rate to +/-0.125 percent.

To reduce the cost of foreign exchange transactions to customers.

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