The South African rand, to which the Namibia dollar is fixed at parity, averaged R6.82:US$1 in December-around 9% stronger than a year earlier. However, in early January the currency began a steady depreciation, which sharpened as political events in Tunisia and Egypt eroded investors' confidence in emerging markets, South Africa among them: the exchange rate in the first week of February averaged R7.21:US$1. Over the next two years, owing to South Africa's relatively high inflation and large current-account deficit, we expect the rand to depreciate further, from an average of R7.32:US$1 in 2010 to R7.64:US$1 in 2011 and R8.37:US$1 in 2012.