Historical Sketch

In 1822, a unified state of the Sotho was formed by paramount chief (king) Moshoeshoe. Due to ongoing conflicts with neighboring Orange Free State, it was placed under a British protectorate in 1868. But three years later followed the annexation by the Cape Colony. As this rule was resented by the Sotho a separate British colony of Basutoland was established in 1884, with the paramount chief nominally keeping his position. Basutoland did not get absorbed into the Union of South Africa in 1910 but remained separate. In 1966 it attained independence as Kingdom of Lesotho.

Monetary History Overview

The British administration extended the South African monetary order to Basutoland. After independence in 1966, Lesotho retained the South African Rand instead of introducing a national currency. This step was taken in January 1980, when the Lesothan Loti became the national currency, at par with the South African Rand and circulating alongside the South African currency. Already in December 1974, South Africa, Botswana, Lesotho and Swaziland signed an agreement to create the Common Monetary Area (CMA), a common currency area based on the Rand. Botswana withdrew already in 1976, while Namibia joined in 1992. All the currencies of the CMA members are legal tender everywhere.

Lesotho joined the International Monetary Fund (IMF) on 25.07.1968.

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