There is no doubt that not issuing central bank paper in the form of Bank of Botswana Certificates to absorb excess liquidity in the banking system would be inflationary and destabilising to the economy.
And yet there is a view in some quarters that the cost of absorbing excess liquidity is too high, and banks would do the right thing if left to themselves; that somehow, the Bank is enriching commercial banks. The Bank of course disagrees with these views. In fact, the “leave-banksand-their-excess-funds-alone” view runs counter to experience world-wide.