NAD (Namibian Dollar)

DEFINITION of 'NAD (Namibian Dollar)'

NAD is the abbreviation for the Namibian dollar, which is the currency of Namibia. This dollar is comprised of 100 cents, similar to the U.S. dollar. In most instances, the Namibian dollar is written with the $ symbol, or with N$ to make a distinction between it and other currencies with dollar denominations.

BREAKING DOWN 'NAD (Namibian Dollar)'

Prior to 1993, the South African Rand was the single, legal currency for the country of Namibia, which was ruled by South Africa as South-West Africa from 1920 until 1990. After gaining independence, the Namibia's currency largely shifted to the Namibian dollar. While the dollar is widely circulated, the Rand is actually still the legal tender in Namibia, because the dollar is pegged to the Rand at par. Residents use both currencies throughout the nation.

Replacing the Rand

A growing movement to replace the outdated South African Rand began in 1990. Because the Namibian dollar is connected to the Rand and has an exchange rate of one to one, the Rand remains the "legal" tender accepted in Namibia. Initially, in 1990, the proposed replacement currency for the country was the "kalahar," a name that reflects the Kalahari Desert, which sprawls across eastern Namibia. Officials drew up several designs for the kalahar and speculated on a range of denominations, but little developed from this.

The only replacement currency for the Rand that ever took shape, and exists today, is the Namibian dollar. This currency’s central bank, the Bank of Namibia, issued the first NAD banknotes in September of 1993, followed by the first coins that December.

Denominations

NAD coins in circulation exist in the amounts of 5, 10 and 50 cents, as well as coins that hold a value of 1, 5 and 10 dollars. There are banknotes in the amounts of 10, 20, 50, 100 and 200 dollars.

Practical Use

While the Namibian dollar is highly utilized in Namibia, it is not legally accepted in South Africa. Within Namibia, the NAD can be exchanged for the Rand without commission. A similar transaction in South Africa, while still able to be performed, generally incurs a weighty commission. In most cases, this commission is about 25%, as of 2016.

Highs and Lows

In terms of the exchange rate with the U.S. dollar, the NAD experienced its all-time low of 2.52 in November of 1990. The record high for the NAD exchange rate at the beginning of 2016 was 16.87.

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