The governor of the Bank of Botswana Cornelius Karlens Dekop has denied claims that the country’s coffers are almost empty. Declining diamond sales have led to the government tapping into its reserves to finance its accounts, leading to widespread speculation that it has used up almost all reserves.
Speaking at a media briefing on Thursday afternoon after the central bank held the benchmark interest rate, Dekop said that although the reserves were understandably under pressure, the country was not in the red yet.
“The fact that we are still able to pay our bills, government employees are getting salaries, store shelves are not empty and Batswana are not queuing for fuel means although times are tough, the country is still in a strong position,” he said.
The central bank governor warned that Botswana’s economy was still operating below optimum levels. The central bank kept the lending rate at 1.9%, which is below the lower bound of its 3-6% optimal range. That, Dekop added, would hopefully drive more economic activity in other sectors as diamond sales go through an extended slump.
The governor also encouraged more entrepreneurial activity to curb the country's increasing trade deficit.