Southern Africa
The rand, the pula and Southern Africa’s linked currencies
Botswana replaced the South African rand with the pula in 1976 and later managed it against a currency basket. Eswatini, Lesotho and Namibia introduced their own currencies at parity with the rand. The central bank records show how the arrangements developed.
Sources checked
- 6 September 1974Lilangeni enters circulation
Eswatini introduced its own legal tender at parity with the rand. Source 1
- 23 August 1976Botswana introduces the pula
The pula replaced the South African rand as Botswana’s national currency. Source 2
- April 1977Botswana revalues the pula
The Bank of Botswana records a 5% revaluation following the currency’s launch. Source 3
- 1980Botswana moves to a currency basket
The new reference combined the rand and the Special Drawing Right. Source 3
- 1980Lesotho introduces the loti
The loti’s value was fixed at par with the rand. Source 4
- April 1986Common Monetary Area agreement revised
Lesotho, Eswatini and South Africa established the CMA under the revised agreement. Source 4
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- 1992Namibia joins the Common Monetary Area
Namibia joined following independence in 1990. Source 4
- September 1993Namibian dollar enters circulation
The Bank of Namibia launched national notes and coins, with the dollar at parity with the rand. Source 5
- May 2005Botswana introduces a crawling band
The policy allowed gradual movement against the reference basket under a defined framework. Source 3
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National banknotes can coexist with a fixed exchange rate
Eswatini introduced the lilangeni in 1974, Lesotho introduced the loti in 1980 and Namibia introduced the Namibian dollar in 1993. Each issued a distinct currency at parity with the rand. The Central Bank of Lesotho records that both rand and loti are legal tender in Lesotho. Source 1 Source 4 Source 5 Source 6
Botswana’s starting point changed after the launch
Botswana’s pula replaced the rand on 23 August 1976. The Bank of Botswana records a 5% revaluation in 1977 and adoption of a reference basket in 1980. The basket included the rand and the IMF’s Special Drawing Right. Source 2 Source 3
The monetary agreement and the currency launch were separate events
The Common Monetary Area agreement was revised in 1986. Namibia joined in 1992, before introducing its own notes and coins in 1993. Those dates describe different institutional changes. Source 4 Source 5
The crawling band allowed incremental changes
Botswana’s May 2005 framework linked the rate of crawl to the difference between its inflation objective and forecast inflation in trading partner countries. That mechanism differs from fixing the currency at one unit per rand. Source 3 Source 4
Sources
- Central Bank of Eswatini, the use of the lilangeni
- Bank of Botswana, August 1976 currency introduction
- Bank of Botswana, history of exchange rate policy
- South African Reserve Bank working paper, Common Monetary Area history
- Bank of Namibia, history and introduction of national currency
- Central Bank of Lesotho, currency and rand parity