Botswana's Fiscal Policy, Monetary Policy, and Exchange Rate Policy: Three Intruments and Three Targets

James Leith ()

No 20202, University of Western Ontario, Departmental Research Report Series from University of Western Ontario, Department of Economics

Abstract: In the decades since Independence Botswana has faced significant macroeconomic challenges. Official institutions set fiscal, monetary, and exchange rate policies in the face of these challenges. This paper identifies a target for each policy, reviews the extent to which each policy has been deployed to achieve its assigned target, and the degree of its success in doing so. Recognising that there are interactions among the policies opens up the possibility of inconsistencies. There have been no egregious inconsistencies, but the failure to take into account the effect of substantial movement of the Rand/SDR exchange rate on prices in Botswana has created a potential policy trilemma.

Keywords: Botswana; policies; fiscal; monetary; exchange rate (search for similar items in EconPapers)
JEL-codes: E5 E6 (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (1)

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