The South African rand, to which the Namibia dollar is fixed at parity, has undergone considerable volatility in the past few months. Having strengthened to R6.6:US$1 in early January, its strongest rate since November 2007, it fell to R7.3:US$1 in mid-February as political events in Tunisia and Egypt eroded investors' confidence in emerging markets; it has rallied since then, reaching R6.8:US$1 at the beginning of April. We expect the rand to appreciate fractionally, to an average of R7.3:US$1 in 2011, before declining in 2012 to R8.2:US$1 owing to South Africa's relatively high inflation and large current-account deficit.