Allied to the Southern African Customs Union (SACU) is the Common Monetary Area (CMA) which links South Africa, Lesotho and Swaziland into a Currency union. Namibia automatically became a member upon independence, but withdrew with the introduction of the Namibian dollar in 1993. Namibia has chosen not to pursue its own flexible exchange rate policy, and the Namibian dollar is at par with the South African rand and there is no immediate prospect of change. The same is true with the lilangeni of Swaziland and the loti of Lesotho. The rand continues to circulate freely in these countries. Foreign exchange regulations and monetary policy throughout the CMA continue to reflect the influence of the South African Reserve Bank. The Southern African Customs Union has five members: Botswana Lesotho Namibia South Africa Swaziland It dates back to colonial days (1910). ... In economics, a monetary union is a situation where several countries have agreed to share a single currency among them, for example, the East Caribbean Dollar. ... The Namibian dollar (abbreviated N$ or NAD) is the national currency of Namibia, adopted in 1993. ... The old R1 and new R10 bank notes The Rand is the currency of South Africa. ... Lilangeni (singular), Emalangeni (plural) is the national currency of Swaziland. ... The Loti (pl. ... Monetary policy is the process of managing money supply to achieve specific goals—such as constraining inflation, achieving full employment or economic growth. ... The South African Reserve Bank is the central bank of South Africa. ...
Of the SACU members only Botswana is currently out of the CMA.
Although some sources extend the definition to include the monetary regimes of national federations such as the United States or of imperial agglomerations such as the old Austro-Hungarian Empire, the conventional practice is to limit the term to agreements among units that are recognized as fully sovereign states under international law.
Similarly, monetary authority may continue to be exercised in some degree by individual governments or, alternatively, may be delegated not to a joint institution but rather to a single partner such as the United States.
The idea of monetary union among sovereign states was widely promoted in the nineteenth century, mainly in Europe, despite the fact that most national currencies were already tied together closely by the fixed exchange rates of the classical gold standard.
Although some sources extend the definition to include the monetary regimes of national federations such as the United States or of imperial agglomerations such as the old Austro-Hungarian Empire, the conventional practice is to limit the term to agreements among units that are recognized as fully sovereign states under international law.
The antithesis of a monetary union, of course, is a national currency with an independent central bank and a floating exchange rate.
Similarly, monetary authority may continue to be exercised in some degree by individual governments or, alternatively, may be delegated not to a joint institution but rather to a single partner such as the United States.
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