Namibia, like any other country, aims to maintain a stable equilibrium in the balance of payments as one of the core objectives of macroeconomic policy. Throughout the years different adjustment mechanisms to balance of payments disequilibria have been developed, namely the monetary approach, the elasticities approach, and the absorption approach. The main aim of this paper is to examine the monetary approach to the balance of payments (MABP), which argues that the balance of payments is a `monetary phenomenon`.