suggest that there is scope for easing monetary policy alongside fiscal expansion, in order to address the imminent decline in economic activity. it is also important to entrench expectations of low and sustainable inflation by containing the secondary effects of any transitory price shocks. furthermore, care will have to be taken to ensure that the foreign exchange reserves remain sustainable. distinguished ladies & gentlemen : let me conclude by reiterating that monetary policy in 2008 was conducted in conditions of international volatility of unprecedented dimensions. accelerating inflation in the first half of the year was replaced by the spectre of financial meltdown and global recession, and as a small open economy, this situation presented enormous challenges for botswana in 2008 and will continue to do so this year. fortunately, the task of meeting the inflation challenge has been made easier by the adoption of a more comprehensive medium - term framework for policy implementation, which has been made possible by ongoing capacity building in inflation forecasting. once again, i would like to reassure you, and all stakeholders, that the bank of botswana is committed to the maintenance of medium - term price stability due to its benefits for the country as a whole. in this regard, the key lesson from the current difficult international situation is that it pays to be prudent in financial and economic management. otherwise, the government would not have been able to accumulate savings in the form of foreign exchange reserves, which should enable the country to weather the unfolding storm. honourable speaker, honourable ministers, honourable members of parliament, your excellencies members of the diplomatic corps, distinguished guests, that prudence ; that strategy ; will continue to guide the conduct of monetary policy this year and in the period ahead. i thank you for your attention.

open up further, supported by the optimism brought about by the gradual deployment of covid - 19 vaccines. on the domestic front, economic prospects are expected to improve as infrastructure and social programs, health capacities, and fiscal policies gain traction. while the real domestic gdp could contract by 8. 5 – 9. 5 percent in 2020 amid the community quarantines, economic activity in the country is projected to recover and expand by 6. 5 – 7. 5 percent in 2021 and by 8 – 10 percent in 2022, as global and domestic economies gradually reopen. moreover, the dbcc, in consultation with the bsp, decided to retain the current inflation target range for 2021 to 2022 at 2 to 4 percent and retain the same inflation target band for 2023 to 2024. amid all the uncertainty, the national government ’ s inflation target remains an important anchor for guiding the economy through the downturn and recovery stages. this inflation target serves as an important guidepost for the bsp. monetary authorities could continue to provide support to the economy after the health crisis through a resolute commitment to deliver low and stable inflation. latest forecasts indicate that inflation will remain within target in 2020 until 2022. bsp forecasts suggest that inflation could average at 2. 6 percent for 2020, 3. 2 percent for 2021, and 2. 9 percent for 2022. the balance of risks to the inflation outlook also leans toward the downside from 2020 to 2022, owing largely to potential disruptions to domestic and global economic activity amid the ongoing pandemic. similarly, inflation expectations appear to be well - anchored to the target range. 3 / 5 bis central bankers'speeches in response to the pandemic, the bsp has taken decisive policy measures to support domestic liquidity, bolster economic activity, and boost market confidence. the cumulative cut in the policy rate by 200 basis points was complemented by decisive liquidityenhancing measures and regulatory relief to banks ’ borrowers experiencing financial difficulty amid the lockdown. in an effort to assist the national government ’ s funding requirement for covid - 19 - related programs and consistent with its liquidity enhancing policies, the bsp has also bought government securities in the secondary market, provided short - term provisional advances, and remitted 20 billion pesos in advance dividends to the national government. in sum, the bsp has injected some php2 - trillion into the financial system, equivalent to 10 percent of 2019 gdp