1999-02-23: Statement on Exchange Control issued by the South African Reserve Bank
Last Modified Date:
2020-10-08, 08:16 PM
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In his 1999/2000 Budget Speech on 1999-02-17, the Minister of Finance indicated that exchange controls would be further relaxed during the year. In the interim it is, however, necessary to adjust certain facilities available to South African residents.Residents travelling abroad will now be allowed a maximum of R120 000 per person of twelve years and older and R35 000 per child under the age of twelve years, per calendar year. South African residents who are studying abroad may be provided with an allowance of R120 000 per annum for a student or R240 000 per annum for a student accompanied by a spouse who is not studying. In addition a student may be furnished with up to R35 000 per annum and those accompanied by their spouses with up to R70 000 per annum to cover travelling expenses during vacation periods. Private individuals are in terms of existing policy permitted to invest up to R400 000 per person offshore provided they are over 18 and taxpayers in good standing. Subject to the same criteria, this limit is now increased by R100 000 and private individuals will be permitted to invest up to a total amount of R500 000 per person. In terms of the asset swap dispensation introduced in 1995 for qualifying institutions whereby they may invest up to 15% of their South African assets abroad, an amount of approximately R130 billion has been approved of which in excess of R60 billion has been transacted. It is, therefore, deemed prudent that the 15% limit is retained for the present. During the calendar year 1998 qualifying institutions were also permitted to invest offshore up to 5% of the net inflow of funds during the calendar year 1997. Additionally an extra 10% of the net inflow of funds during the calendar year 1997 could be invested during 1998 in securities listed on stock exchanges in SADC countries other than Namibia, Swaziland and Lesotho where no restrictions apply.These dispensations are now renewed for the calendar year 1999 based on the net inflow of funds during 1998 at the same levels of 5% and 10%, respectively.In line with international practice and to accommodate permissable foreign currency payments for small transactions e.g. imports over the Internet, South African residents will be allowed to make such payments via credit/debit cards. Payments will be limited to R20 000 per transaction. This arrangement will, however, not absolve cardholders from complying with the requirements imposed by the Customs authorities or ad valorem excise and customs duties. Since certain administrative arrangements will have to be put in place, this dispensation will become effective as soon as is practicable.