Lesotho Loti (LSL): What It is, How it Works

What Is the Lesotho Loti (LSL)?

The Lesotho loti (LSL) is the official currency of the Kingdom of Lesotho. One loti can be subdivided into 100 units known as lisente.

LSL coins are issued in denominations of 1, 2, 5, 10, 20 and 50 lisente, and 1, 2 and 5 loti. LSL banknotes are issued in denominations of 10, 20, 50, 100 and 200 loti. The loti appears locally with one of two alphabetical symbols: L for loti, or M for maloti, which is the plural form of loti.

As of March 2021, 1 LSL is worth U.S. $0.06.

Understanding the Lesotho Loti

The Lesotho loti was first introduced in 1966, but as a non-circulating currency. Instead, it served as a numeraire to price things in such as the government's debt, but other currencies were used in exchange. Loti coins were first issued into circulation in 1980. The loti is pegged to the South African rand (ZAR) at par through South Africa’s Common Monetary Area.

Although the loti was intended to be a replacement for the South African rand, the latter currency is still legal tender today in the Kingdom of Lesotho. The original loti banknotes were very colorful, had multiple different designs, and came in several different sizes. Nevertheless, the notes were often counterfeited, prompting the release of a new issue of the banknotes in 2011.

Currency rankings show that the most popular Lesotho loti exchange rate is the U.S. dollar to the LSL.

The African Common Monetary Area

The Common Monetary Area, or CMA, also known as the Rand Monetary Area (RMA), was established in 1986 by the Kingdom of Lesotho, Swaziland, Botswana, and the Republic of South Africa. Its intent was to establish an exchange rate and monetary system within the three countries. Namibia joined the CMA in 1992, two years after gaining its political independence from South Africa.

The ultimate outcome of the CMA is that it established the South African rand as the common currency between all four countries, while giving the three smaller countries their own national currencies. The CMA was also intended to facilitate trade between the member nations, while pegging each local currency to the rand was done to help ensure price stability in the region.

Lesotho is also a member of the Southern African Customs Union (SACU), whose purpose is to control tariffs on the trading of goods among the member countries.