South African rand as Daan Desimaal). This was accompanied by a radio jingle, to inform the public about the new currency. One Rand was worth US$1.40 from the time of its inception in 1961 until late 1971. Its value thereafter fluctuated as various exchange rate dispensations were implemented by the South African authorities. By the early-1980s, high inflation and mounting political pressure combined with sanctions placed against the country due to international opposition to the apartheid system started to erode its value. The currency broke above parity with the dollar for the first time in March 1982, and continued to trade between R
Currency substitution On the other hand, currency substitution leads to the loss of seigniorage revenue, the loss of monetary policy autonomy, and the loss of the exchange rate instruments. Seigniorage revenues are the profits generated when monetary authorities issue currency. When adopting a foreign currency as legal tender, a monetary authority needs to withdraw the domestic currency and give up future seigniorage revenue. The country loses the rights to its autonomous monetary and exchange rate policies, even in times of financial emergency. For example, former chairman of the Federal Reserve Alan Greenspan has stated that the central bank considers the effects of