Market determined exchange rates are prone to excess volatility that can be damaging to the real economy. Overshooting of the exchange rate could have some real negative economic effects. The elimination of such fluctuations promotes economic stability. This is particularly important given the volume of Namibian trade with South Africa.
Overshooting of the exchange rate between countries doing little trade may not matter much, but between countries engaged in substantial trade, it does. A stable exchange rate will ensure the stability of the prices of traded goods and hence eliminate volatility - not only in the exchange rate - but also in wages and prices and hence enhance economic performance.