Independence and the Namibia dollar

Namibia became independent from South Africa in March 1990 and was part of the Common Monetary Area with South Africa, Lesotho and Eswatini, which uses the rand. The Bank of Namibia was established in 1990 and introduced the Namibia dollar in September 1993, pegged at parity to the South African rand and issued alongside it. The one-to-one link means Namibia effectively imports South African monetary policy: its interest rates follow those of the South African Reserve Bank, and its inflation closely follows South Africa's, with the exchange rate moving with the rand against other currencies. The peg has given stability but limits policy independence, and it explains why Namibia's inflation and exchange-rate charts follow those of South Africa, while swings in output depend more on diamonds, uranium, fishing and rainfall.