Which landlocked country, completely surrounded by South Africa, is known for its unique blanket-making traditions and its mountainous terrain, often referred to as the 'Kingdom in the Sky'?

1. Its economy is heavily reliant on South Africa.
2. It is one of the highest countries in the world, with the entire country lying above 1,000 meters.
3. The local currency is pegged to the South African Rand.
4. The current monarch is King Letsie III.