PRAVIN Gordhan yesterday doubled the amount of money individuals may invest abroad to R4million and increased the ceiling for foreign corporate investment without specific central bank approval tenfold to R500million.
In the biggest foreign exchange control relaxation in a decade, Gordhan said: "Reform of exchange controls can facilitate greater two-way flow of capital and help to reduce volatility."
Bloomberg reported the rand down as much as 11 cents on the news and on comments about the currency being too strong. He said the Treasury would do everything in its power to help the central bank build its foreign exchange reserves beyond the current R306billion. He mentioned R344billion, but did not set that as a specific target.
Gordhan said the reforms would help to manage risk in a volatile global environment, but still lower the cost of doing business. The reforms make it easier to trade and invest abroad without seeking prior approval from the SA Reserve Bank and shift the focus of regulation to reporting obligations. It will also allow businesses to open foreign bank accounts to manage permissible operations without having to get approval in advance.