Common Monetary Area

The Southern African Customs Union (SACU) includes all CMA members in addition to Botswana, which replaced the rand with the pula in 1976 as a means of establishing an independent monetary policy.

[1][2] Although the South African rand is legal tender across the CMA, the other member states issue their own currencies exchanged at par with it: the Lesotho loti, Namibian dollar and Swazi lilangeni.

Foreign exchange regulations and monetary policy throughout the CMA continue to reflect the influence of the South African Reserve Bank.

The CMA, enacted in July 1986,[3] originated from the Rand Monetary Area (RMA), which was formally established in December 1974;[4] the signatories of the latter were South Africa, Lesotho, and Swaziland.

They can only have access to the money and capital markets through prescribed investments or approved securities that can be held by financial institutions in South Africa in accordance with prudential regulations between the LNS countries.

Compensation payments are based on the formula equal to the product and the volume of rand estimated to be in circulation in the member country concerned.