BWP (Botswana Pula)

What Is the BWP (Botswana Pula)?

BWP is the ISO currency code for the official currency of Botswana, the pula, and the symbol "P" addresses it. The Bank of Botswana issues and deals with the pula. Pula means "rain" or "gift" since rain is so scant in Botswana and is viewed as important. The pula is comprised of 100 thebe, and that means "safeguard."

Figuring out the Botswana Pula

The Botswana pula is pegged to a basket of currencies, which operates utilizing a crawling band exchange policy utilizing special drawing rights (SDR) and the South African rand (ZAR) as reserve assets.

Special drawing rights are an international monetary reserve asset issued by the International Monetary Fund (IMF). They operate as a supplement to existing money reserves and act as a reserve asset for member countries. Reserve assets incorporate currency, commodities, or other financial capital held by central banks, to reestablish confidence in the financial adequacy of the country's money if necessary.

As per World Bank data, Botswana registered 2.97% yearly GDP growth in 2019 and a 2.77% increase in inflation. Botswana's economy is energized basically by mining, the travel industry, steers, materials and salt.

History of the Botswana Pula

At the hour of its independence in 1966, Botswana (alongside neighbors Lesotho and Swaziland) kept on involving the South African rand as its currency as a member of the Rand Monetary Area (RMA). In 1973, the four countries started talks on another currency and banking treaty, known as the Rand Monetary Area agreement, that would have permitted the more modest economies to issue their own national currencies while continuing to acknowledge the rand as legal tender. Be that as it may, before the pact was endorsed in 1974, Botswana pulled out from talks and announced its expectations to set up its own central bank.

The pula appeared on August 23, 1976, a day that is celebrated yearly as Pula Day. The currency was initially pegged to the U.S. dollar, with P1 approaching $1.15. The South African rand was additionally pegged to the U.S. dollar at a similar rate, inferring parity between the pula and the rand. The pula basket was presented in 1980 after the rand moved off its dollar peg.

The Botswana pula is completely convertible after foreign exchange controls were abrogated in 1999. Before the rand, Botswana utilized:

• British pound sterling from 1885 to 1920
• the South African pound from 1920 to 1961
• the South African rand from 1961 to 1976

The pula has gone through many changes since its presentation in 1976. The currency sent off with four bank notes in the denominations of P1, P2, P5 and P10, alongside five coins issued in denominations of 1t, 5t, 10t, 25t and 50t. Throughout the long term, the government presented higher value notes and coins, for example, P1 and P2 coins, attributable to their more successive use.

In 2000, the Bank of Botswana presented a P5 coin and another P50 note, which includes the representation of Sir Seretse Khama, the country's most memorable president. Additionally presented that year was the P100 note bearing the pictures of the three bosses — Bathoen I, Khama III and Sebele I — who acquired British protection over Bechuanaland (what is available day Botswana).

In August 2009, the Bank of Botswana presented another family of banknotes, including another P200 denomination. The P200 note includes a picture of a lady showing understudies, which is intended to underscore education and the contribution of ladies to the country's development.

BWP in the Forex Market

Accept the rate of the USD/BWP is 10.86. This means it costs 10.86 pula buy one U.S. dollar.

Assuming the rate increases to 12, that means the pula has lost value relative to the USD, since it currently costs more pula to buy the U.S. dollar. In the event that the rate tumbles to 9.5, the pula has fortified in value relative to the USD, since it presently costs less pula to buy the USD.

To figure out the number of U.S. dollars it takes to buy one pula, isolated one by the USD/BWP exchange rate. This will give the BWP/USD rate. For instance, in the event that the rate is 10.86 for the USD/BWP, the BWP/USD rate is 1/10.86, or 0.09208. This means it costs $0.09208 to buy one pula.

Features

• The Botswana pula is the official currency of Botswana and trades under ISO currency code BWP.
• The pula is pegged to a basket of currencies, weighted toward the South African rand and IMF special drawing rights.
• Botswana is a relatively quickly developing country, with major industries including mining and dairy cattle processing.