Finally, where the reserve currency country is also the peg currency country’s major trading partner, as in the case of South Africa and Namibia, exchange rate flexibility as a policy tool becomes less effective. Stability of the rand as a reserve currency The issue of a choice of reserve currency is very crucial in deciding to peg the domestic currency.
Among factors that may have determined the choice of the rand as a reserve currency are the direction  BIS Review 127/1999  4  of trade flows, the denomination of imports and exports, the deep financial market offered by South Africa and the correlation among cyclical movements between the economy of Namibia and South Africa.