The Namibian operation was hard hit last year by the strengthening of the South African currency, to which the
Namibian dollar is tied in the rand-led common monetary area.
Namibia is not in plans to delink the
Namibian dollar from the South African Rand despite costs involved in the arrangement, said the central bank s director of strategic communication and financial sector development Ndangi Katoma on Monday.
The
Namibian Dollar has depreciated by about 18% to the US Dollar since the beginning of this year.
The
Namibian dollar, Lesotho's maluti, and Swaziland's lilangeni are all pegged to and rise and fall in line with the rand.
More records can be noted in the books of the swakara industry, with the highest average price in
Namibian Dollar ever paid for swakara pelts and the highest price in
Namibian Dollar ever for a lot of white pelts at the April pelt auction in Copenhagen.
Importers, however, were constrained by higher financing costs, the depreciation of the
Namibian dollar and weak domestic demand.
With this agreement, business people and traders will be able to legally exchange local currencies in either country, putting an end to the practice were traders have to buy US dollars before converting them into Angolan kwanza or
Namibian dollar.
In the case of Namibia the depreciating
Namibian dollar may hopefully improve export earnings this year.
Yet this is still better than the 45% fall in the local index of the NSE last year further compounded for foreign investors by the steep depreciation of the
Namibian dollar against the US dollar last year.
The impact in Namibia can be attributed mainly to the depreciating value of the
Namibian dollar.
A probable appreciation of the
Namibian dollar may resist some of the inflationary impact originating from the mentioned pressures.
The results were achieved despite an increase in operating costs attributed mainly to the depreciation of the
Namibian dollar against the Euro and the US$ and the high sin tax of up to 40% imposed by the Botswana Government, a key export market.
