As the central bank for Botswana, 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 acts as a lender of last resort in Pula on a daily basis. The Bank’s trading in foreign currency is guided by the exchange rate policy, with the Pula kept within a narrow band around the exchange rates determined by the policy. The Bank trades continuously during business hours with domestic banks in both foreign exchange and money market instruments. The Bank also plays a key role in the issuance of Government bonds and treasury bills, for which it currently conducts half-yearly auctions and maintains close contact with the Primary Dealers in the market.
Within the Bank, the Financial Markets Department is responsible for the Bank’s operations in the domestic foreign exchange, money and bond markets. This entails operational implementation of the exchange rate and monetary policies through the conduct of the daily and weekly operations with the domestic banks in foreign exchange and various monetary policy instruments. Furthermore, the conduct of the domestic market operations is facilitated by regular communication with the domestic banks through various committees and daily contacts.