Namibia's Currency and FinanceAfter Independence the Bank of Namibia was founded and introduced in 1993 the Namibia Dollar (N$, NAD) as the country's own currency. It displaced the South African Rand, but the Namibia Dollar was coupled 1:1 with the Rand (R, ZAR). The South African currency is still accepted as a valid means of payment in the whole of Namibia.
Plans to decouple the Nam Dollar completely from the South African Rand have always been discarded respectively postponed so far. Because of the relatively small amount of currency volume the stability of the currency might be extremely volatile and the Namibia Dollar could easily become a plaything for speculators. And dealing with South Africa, the main trading partner, would become unnecessarily complicated.
The disadvantage is the dependence on the monetary policy of the South African Reserve Bank, which traditionally follows a high-interest strategy and of course primarily serves the interest of South Africa. Overall the South African monetary policy has been skilful over the last years. Through well-timed buying and selling of US dollars and other important foreign currencies and the Currency Exchange Controls, the Rand continued to be relatively stable and the inflation could be kept on a supportable level. These interventions were also in favour of the Namibian economy, which strongly depends on the export of raw materials and thereby on the currency exchange rate.
Namibian Stock Exchange
A success story is the Namibian Stock Exchange. It was founded in 1994 under the licence of the Namibian Ministry of Finance. Within one year turnovers rose by 1000%. At present 34 Namibian and foreign companies are listed at the Namibian stock exchange, among them Anglo-American (De Beers) and other major mining corporations, Namibia Breweries, finance and insurances titles as well as the big banks of South Africa. Namibia's stock exchange is - behind Johannesburg - the second biggest in Africa.