Botswana Announces 2.76% Devaluation of Its National Currency to Counter Diamond Market Slump
Botswana Announces 2.76% Devaluation of Its National Currency to Counter Diamond Market Slump
The adjustment aligns with Botswana’s biannual currency peg review, which ties the national currency, the pula, to a basket of currencies, including the South African rand, to maintain stability, a finance ministry official confirmed.
The diamond sector, a pillar of Botswana's GDP, triggered a 3% economic contraction in 2024, with further decline expected in 2025. Additionally, foreign reserves have dwindled to five months of import cover (down from 10+ months), pressuring the exchange-rate system.
President Mokgweetsi Masisi approved the steeper devaluation (up from 1.51% in December 2024) to boost local competitiveness and curb demand for foreign currency.
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