The Bank of Botswana plays a key role in the domestic financial markets. Various money market instruments are used to influence liquidity in the economy, and the Bank also acts as a lender of last resort in Pula on a daily basis, should the need arise. The Bank’s trading in the domestic foreign exchange market is guided by the exchange rate policy, with the Pula exchange rate kept within a defined band guided by the policy. The Bank trades continuously during trading hours with domestic banks in both foreign exchange and money market instruments. The Bank also plays a key role in the issuance of Government securities (bonds and treasury bills), for which it currently conducts monthly auctions and maintains close contact with the Primary Dealers in the market.

The Financial Markets Department is responsible for the Bank’s operations in the domestic foreign exchange, money and government securities markets. This entails operational implementation of the exchange rate and monetary policies through the conduct of daily and weekly operations with the domestic banks. Furthermore, the conduct of the domestic market operations is facilitated by regular communication with the domestic banks through various committees and daily contacts.