It is with this thought in mind that I want to share with you how we go about these specific central bank tasks at the Bank of Botswana. Monetary stability in Botswana is pursued through a monetary policy that aims to achieve a sustainable low and predictable level of inflation.
Rapid accumulation of foreign, largely dollar, reserve holdings by the People’s Bank of China, China’s central bank, as a consequence of support for the RMB could boost the growth of the money stock, with the accompanying risk of triggering upward pressure on inflation and a general overheating of the Chinese economy.