Cloud over currency controls
Could SA be in for exchange restrictions?
Economic worries and ANC’s chaotic planning raise fears of some renewed form of exchange restrictions
The prospect of a further ratings downgrade and resultant capital flight has raised the spectre of a crackdown on exchange control. But the SA Revenue Service (Sars) and the Reserve Bank have refused to say if delays in obtaining clearance for offshore allowances this year are deliberate, or simply a function of stampeding demand. Geoff Blount, MD at private client firm BayHill Capital, says: "From our experience in terms of processing offshore allowances, there has definitely been a very apparent slowdown in turnaround times. Where previously it was a couple of days sometimes it now takes months." Still, he doubts the delays are sinister. "I doubt there’s any move afoot to reinstate exchange control. I think it’s about administrative capacity, not a precursor to a policy shift." But what are the odds of a return to capital controls, like the financial rand, introduced after PW Botha’s disastrous Rubicon speech in 1985? "It’s expected during fiscal strain for governments to think ab...