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In the last few years, Lesotho has made significant progress in macroeconomic performance (strong GDP growth, fiscal surplus, current account surplus, and high international reserves). Nevertheless, Lesotho remains exposed to economic developments in South Africa (through the monetary union and the pegged exchange rate) and relies heavily on workers’ remittances, customs revenues from SACU, and royalties for transfer of water to South Africa.

Lesotho’s the vulnerability arises from two main sources: its huge dependence on textile exports to the US and on revenues from SACU (60% of total revenues). Firstly, the USA is Lesotho’s largest importer of its manufacturing exports (mainly textiles), and the recession lowered the aggregate demand by US consumers. Secondly, a slowdown in South Africa is likely to have a significant impact on remittances and SACU revenues. The recent large SACU transfers are in fact mostly due to growth in South African imports. Lower South African imports will therefore negatively affect Lesotho’s revenue stream. Similarly, retrenchments in South Africa will lower workers’ remittances towards Lesotho. 

SACU revenues are expected to decline in the next two years, resulting in the current account moving from surplus to deficit. Lesotho’s challenge is to reposition itself to take advantage of its proximity to SA markets, improve the efficiency of public resources, and exploit the potential of non-traditional sectors.

The loti (plural: maloti) is the currency of the Kingdom of Lesotho. It is subdivided into 100 lisente (sg. sente). It is pegged to the South African rand on a 1:1 basis through the Common Monetary Area and both are accepted as legal tender within Lesotho. The loti was first issued in 1966, albeit as a non-circulating currency. In 1980, Lesotho issued its first coins denominated in both loti and lisente to replace the South African rand of Lesotho, though the Rand remains legal tender.

Coins in circulation are: 5 lisente, 10 lisente, 20 lisente, 50 lisente, 1 loti, 2 maloti, and 5 maloti.

In January 1980, banknotes dated 1979 (the last two digits of the year of issue are the serial number prefix denominator) were introduced in denominations of 2, 5 and 10 maloti. 20 and 50 maloti notes were added in 1981, followed by 100 and 200 maloti in 1994.

On 1 March 2011, at a celebration marking its 30th anniversary, the Central Bank of Lesotho launched a new series of banknotes dated 2010 aimed at fighting the spread of counterfeits. The notes feature a portrait of the three royal family members: the current king, His Majesty Letsie III is in the middle, his father King Moshoeshoe II is on the left, and the founder of the Basotho nation, King Moshoeshoe I, on the right.