Under its governing legislation, the Bank of Botswana is banker, financial and economic policy adviser and fiscal agent to the Government of Botswana. The Government is also the sole shareholder in the Bank, from which it receives an annual dividend, and Government representatives sit on the Bank's Board.
As the Government's banker, the Bank is the official depository of Government funds, receiving deposits and making payments (in both domestic and foreign currency) on its behalf. The Bank also issues and trades in securities, bonds and treasury bills on behalf of Government. Statutory corporations and local authorities may also make arrangements to operate accounts at the Bank, and the Bank may make loans to Government and statutory bodies, although this is only done under strict conditions as prescribed by legislation. If such bodies wish to borrow from other sources, they must seek the advice of the Bank.
The Bank works very closely with Government in many areas of policy formulation and implementation, and participates on various standing committees and ad hoc working groups. Notably, the Bank is further mandated to implement exchange rate policy on behalf of the Government, and must be consulted in its formulation; it also implements any regulations that may be in place relating to exchange control, although no such restrictions are currently in place. Monetary policy, although not formally covered through legislation, is conducted by the Bank through the Monetary Policy Committee.