Regulatory Alerts2025-06-11
Bank of Botswana Guidelines on Liquidity Coverage Ratio
Issued by the Bank of Botswana, these guidelines establish a phased Liquidity Coverage Ratio framework requiring licensed banks to hold adequate unencumbered high-quality liquid assets to cover net cash outflows during a 30-day stress scenario. The minimum ratio begins at 60 percent in December 2025 and scales to 100 percent by December 2029, mandating daily aggregated reporting alongside monthly or quarterly monitoring of significant currencies. Banks must align internal stress tests with Basel III standards, ensure operational monetization capabilities for their asset stock, and face proportionate supervisory penalties for non-compliance.
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