BOB defends its monetary policy

Bank of Botswana (BoB) leapt to the defence of its Monetary Policy while at the same time conceding that local commercial banks are making “abnormal profits” that raise concern through lending interest rates.

The move by the central bank follows an article carried by Sunday Standard a fortnight ago that stated that local commercial banks were making a killing out of Bank of Botswana Certificates (Bobcs) and the lending interest rates.

The Sunday Standard article was based on Professor Roman Grynberg’s research, "The Cost of Botswana’s Monetary Policy" that showed that, under the current tools used by Bank of Botswana, commercial banks are making huge profits from unbelievable interest rates while at the same time getting huge returns from Bobcs at no risk. Click here for more.



Botswana pays heavily for its monetary policy

The Sunday Standard Newspaper (12.09.10 edition) carries news that the Central Bank’s monetary policy has been sharply criticised for enabling the local commercial banks to rip-off customers through huge interest rates while at the same time milking the country of billions of pula through Bobcs. This has emerged from a recent research report by Professor Roman Grynberg, a Senior Research Fellow at the Botswana Institute for Development Policy Analysis (BIDPA)

In his paper, entitled “Cost of Botswana Monetary Policy”, which is currently circulating within a close net of people, Professor Roman Grynberg charged that the tolls that are employed by Bank of Botswana have enabled commercial banks to profit from unbelievable interest rates while at the same time getting huge returns from Bobcs at no risk. Click here to read more...

Bank of Botswana Research Bulletin

The Research Bulletin is the forum through which the Bank of Botswana publishes a selection of economic research which is judged suitable for wider dissemination.  Most articles are prepared by Bank staff, mainly from the Research Department, but also more widely. The current, August 2010 edition contains the following articles:

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  2010 Monetary Policy Statement
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  The Southern African Customs Union (SACU): Agreement: Past, Present and Future Prospects
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  The Efficiency of the Botswana Equity Market
• 
  
  Interpreting National Accounts Estimates for the General Government Sector: The Case of Botswana

Click here to access the bulletin.

Mid-Term Review of the 2010 Monetary Policy Statement: Bank of Botswana

The Bank of Botswana has published the Mid-Term Review of the 2010 Monetary Policy Statement. The review notes that the prevailing monetary policy stance remains consistent with achieving the current medium-term objective for CPI inflation of 3 – 6 percent. The review further indicates that the policy remains appropriate for supporting economic recovery, including sustained growth in the non-mining sectors.

As anticipated at the beginning of this year, the economy began to recover during the first quarter although the overall level of domestic economic activity was below trend, a factor that exerted low demand pressures on inflation. Price developments were also in line with the projections, with inflation rising in the first half of 2010, from 5.8 percent in December 2009 to 7.7 percent in June 2010, due to the increase in value added tax (VAT), as well as electricity tariffs and fuel prices. Click here to read more.