The Common Monetary Area (CMA) links South Africa

South Africa

The Republic of South Africa is a country in southern Africa. Located at the southern tip of Africa, it is divided into nine provinces, with of coastline on the Atlantic and Indian oceans...

, Lesotho

Lesotho

Lesotho , officially the Kingdom of Lesotho, is a landlocked country and enclave, surrounded by the Republic of South Africa. It is just over in size with a population of approximately 2,067,000. Its capital and largest city is Maseru. Lesotho is a member of the Commonwealth of Nations. The name...

 and Swaziland

Swaziland

Swaziland, officially the Kingdom of Swaziland , and sometimes called Ngwane or Swatini, is a landlocked country in Southern Africa, bordered to the north, south and west by South Africa, and to the east by Mozambique...

 into a monetary union. It is allied to the Southern African Customs Union

Southern African Customs Union

The Southern African Customs Union is a customs union among five countries of Southern Africa: Botswana, Lesotho, Namibia, South Africa and Swaziland.-History:SACU is the oldest still existing customs union in the world...

 (SACU). Namibia

Namibia

Namibia, officially the Republic of Namibia , is a country in southern Africa whose western border is the Atlantic Ocean. It shares land borders with Angola and Zambia to the north, Botswana to the east and South Africa to the south and east. It gained independence from South Africa on 21 March...

 automatically became a member upon independence, but withdrew with the introduction of the Namibian dollar

Namibian dollar

The dollar has been the currency of Namibia since 1993. It is normally abbreviated with the dollar sign $, or alternatively N$ to distinguish it from other dollar-denominated currencies...

 in 1993. Namibia has chosen not to pursue its own flexible exchange rate

Exchange rate

In finance, an exchange rate between two currencies is the rate at which one currency will be exchanged for another. It is also regarded as the value of one country’s currency in terms of another currency...

 policy, and the Namibian dollar is at par with the South African rand

South African rand

The rand is the currency of South Africa. It takes its name from the Witwatersrand , the ridge upon which Johannesburg is built and where most of South Africa's gold deposits were found. The rand has the symbol "R" and is subdivided into 100 cents, symbol "c"...

 and there is no immediate prospect of change. The same is true with the lilangeni of Swaziland and the loti

Lesotho loti

The loti is the currency of the Kingdom of Lesotho. It is subdivided into 100 lisente . It is pegged to the South African rand on a 1:1 basis through the Common Monetary Area, and both are accepted as legal tender within Lesotho. The loti was first issued in 1966, albeit as a non-circulating...

 of Lesotho. The rand continues to circulate freely in these countries. Foreign exchange regulations and monetary policy

Monetary policy

Monetary policy is the process by which the monetary authority of a country controls the supply of money, often targeting a rate of interest for the purpose of promoting economic growth and stability. The official goals usually include relatively stable prices and low unemployment...

 throughout the CMA continue to reflect the influence of the South African Reserve Bank

South African Reserve Bank

The South African Reserve Bank is the central bank of South Africa. It was established in 1921 after Parliament passed an act, the "Currency and Bank Act of 10 August 1920," as a direct result of the abnormal monetary and financial conditions which World War I had brought...

.

Of the SACU members only Botswana

Botswana

Botswana, officially the Republic of Botswana , is a landlocked country located in Southern Africa. The citizens are referred to as "Batswana" . Formerly the British protectorate of Bechuanaland, Botswana adopted its new name after becoming independent within the Commonwealth on 30 September 1966...

 is currently out of the CMA, having replaced the rand with the pula

Botswana pula

The pula is the currency of Botswana. It has the ISO 4217 code BWP and is subdivided into 100 thebe. Pula literally means "rain" in Setswana, because rain is very scarce in Botswana - home to much of the Kalahari Desert - and therefore valuable. Pula also means "blessing" as rain is considered a...

 in 1976.

The CMA, enacted in July 1986, originated from the Rand Monetary Area (RMA), which was established in December 1974; the signatories of the latter were South Africa, Lesotho, and Swaziland. The CMA has since been replaced by the present Multilateral Monetary Area (MMA) as of February 1992, when Namibia formally joined the monetary union.

See also

• Eco
  Eco (currency)
  The Eco is the proposed name for the common currency that the West African Monetary Zone plans to introduce in the framework of ECOWAS. Originally the introduction of the currency was planned for December 1, 2009, however this date was revised to 2015. The original five member states are the...
  
  , another attempt at an African common currency, within the ECOWAS community.
• African Monetary Union
  African Monetary Union
  The African Monetary Union is the proposed creation of an economic and monetary union for the countries of the African Union, administered by the African Central Bank...
  
  
• The West African CFA franc
  West African CFA franc
  The West African CFA franc is the currency of eight independent states in West Africa: Benin, Burkina Faso, Côte d'Ivoire, Guinea-Bissau, Mali, Niger, Sénégal and Togo. The acronym CFA stands for Communauté financière d'Afrique...
  
   and Central African CFA franc
  Central African CFA franc
  The Central African CFA franc is the currency of six independent states in central Africa, Cameroon, Central African Republic, Chad, Republic of the Congo, Equatorial Guinea and Gabon. CFA stands for Coopération financière en Afrique centrale...
  
   (C.F.A.) are other existing African currency unions.
• Monetary union