What Is Pula and How Can It Be Used?

Pula, sometimes called “the coin of Botswana”, is the official currency of Botswana. Although it is the local currency of Botswana, Pula can also be found in the neighboring countries of Namibia, Zimbabwe, and South Africa. It is heavily impacted by currency exchange rates in the global economic markets and is subject to regular fluctuations.Pula, which translates to “rain” in Setswana, is also the name for the Central Bank of Botswana. With an interesting history of development, Pula is a popular currency for international businesses and travelers who are interested in exploring the rich history and culture of the country of Botswana. Despite uncertainties related to instability in the global economic market, Pula continues to provide stability to its own economy. In this article, readers will gain insight into the history of the Pula and practical information regarding the currency itself.

History and Development of Pula

The modern-day Pula was established in 1976 following the country’s independence from Great Britain. Prior to that time, Botswana used a variety of foreign currencies, including the South African Rand, British Pound Sterling, and Botswana’s own subunits called Thebe. When Pula was established, the banknotes were issued in denominations of 2, 5, 10, and 20 pula. Coins were issued two years later in denominations of 1, 5, 10, 25, and 50 thebe, with each equaling one Pula. In 2006 and 2007, due to rising inflation and demands for additional coins and banknotes, Pula was reformulated. The Bank of Botswana birthed new banknotes and coins in denominations 10 pula coins, 50 pula coins, 100 pula coins, a 500 pula banknote, 1 thebe coins, and a 1000 pula banknote. Pula works closely with the Southern African Development Committee (SADC), maintaining constant market analysis alongside the countries of Angola, Comoros, Mozambique, Madagascar, Mauritius, Namibia, Seychelles South Africa , Tanzania and Zambia.

Value And Exchange Rates Of Pula

The current Pula/US Dollar exchange rate is given as 1 P = 0.0897 US Dollars (USD). The US Dollar has emerged as a relatively stable currency. This means that like many other currencies around the world, the Botswanan pula pegs its value on the United States Dollar. The European Union has an agreement with SADC to fix this rate. According to the agreement, only the South African Rand is allowed to be freely traded on Forex markets. Because the Dollar rate remains relatively consistent while the Rand will fluctuate with tensions between other countries or the EU itself, it helps Botswana maintain its balance with foreign partners. However, due to global economic issues like sovereign debt and global recession or market speculations like Brexit can lead to drastic changes in exchange rates. It is also important to note that due to frequent devaluations against major currencies such as the US Dollar and Euro; travelers cannot expect to receive a rate as good as they may when leaving Botswana using US Dollars or Euros.

Common Uses For Pula

Pula is the primary currency for purchases within Botswana itself. As more businesses shift from cash towards digital payments; debit cards which can store both foreign currency (like USD) and pula are growing in popularity in Botswana. Merchants who sell goods in Botswana are legally required to accept pula as payment for goods or services. Exceptions are commonly made for certain imported goods from outside the country. In some other African countries like Namibia and Zimbabwe; foreign currency (like USD) is often accepted as payment in stores as well; however this type of practice is not encouraged by government for legal/financial regulation reasons.

International Use Of Pula

Currently Pula is only used in Botswana itself and in neighboring countries like Zimbabwe and Namibia using informal exchanges which do not adhere to standard currency exchange rates; however over time this may change. Although some online merchant sites such as Amazon offer products using US Dollars or Euros; they are still commonly used in Botswana as well. Foreign travelers who visit Botswana should keep this in mind when making purchases as export taxes on certain goods can add an additional cost when purchased with foreign currency. Additionally, international companies who have business interests in Botswana may need to consider making payments directly to their Botswanan partners in local currency as opposed to their own for legal/financial reasons and to avoid additional fees which often accompany cross-border payments switching from one currency to another.

Conclusion

Pula is an important facet of Botswanan culture and economics today. As a major trade partner with neighboring nations; it provides a stable environment for businesses engaging in import/export activities between different countries. As an important part of global banking systems, Pula provides access to global markets while ensuring that domestic operations continue without disruption from outside forces. It’s stable value against both domestic and foreign currencies; combined with laws requiring merchants within Botswana accept it for payment for goods or services regardless of currency proves it’s increasing reliability both domestically as well as abroad. For more information about Botswana’s currency system you can check out the website of the Bank of Botswana.