Answer to Question #233376 in Macroeconomics for Nambili

Question

The Namibian economy is closely linked to South Africa with the Namibian dollar pegged to the South African rand. Discuss the monetary arrangement & the peg and how it works. Please refer to the Common Monetary Area

Answer 1

Since the South African rand is linked to Namibian Dollar and has a pegged 1:1 exchange rate, South African rand maintain to be legal tender form within South Africa. Previously, there was a proposal on replacing the country's currency with the name Kalahar, reflecting on Kalahari desert that sprawls on eastern Namibia.