This document discusses exchange rates and devaluation in Botswana. It explains that Botswana's exchange rate is determined relative to a basket of currencies, with weights based on trade patterns. Botswana has experienced high inflation relative to trading partners, hurting competitiveness. Devaluation aims to improve competitiveness and export-led growth by making Botswana's exports cheaper, though it also risks higher import costs and inflation in the short term. The impact depends on accompanying reforms to reduce costs. Overall, devaluation is necessary but not sufficient for growth, and a crawling peg can help maintain competitiveness without frequent devaluations.