No data available for the deliverable: Modernise forex system for trade and investment to align with OECD code of liberalisation
No data available for the deliverable: Modernise forex system for trade and investment to align with OECD code of liberalisation
No data available for the deliverable: Modernise forex system for trade and investment to align with OECD code of liberalisation
No data available for the deliverable: Modernise forex system for trade and investment to align with OECD code of liberalisation
No data available for the deliverable: Modernise forex system for trade and investment to align with OECD code of liberalisation
Summary
Modernising South Africa's foreign exchange controls involves phased liberalisation of forex regulations, regulatory updates and alignment with the OECD code and AfCFTA requirements.
View DetailsIs it working?
The reform is advancing, with incremental improvements and strong alignment with global trends. Full liberalisation is expected after 2026, as regional integration deepens.
Actions
The system is becoming more flexible and transparent, supporting trade and investment, though full liberalisation is still in progress.
Are there plans?
Regulatory changes are being implemented incrementally, with new reporting requirements and stakeholder engagement.
Is it on the agenda?
Forex modernisation is an ongoing SARB and Treasury agenda item, with regular updates and consultations.
Goals
To modernise foreign exchange controls, facilitate trade and investment and align with international standards.
Documents
References
Departments / Govt Institutions
National Treasury Prudential Authority South African Reserve Bank (SARB)
Summary
Modernising South Africa's foreign exchange controls involves phased liberalisation of forex regulations, regulatory updates and alignment with the OECD code and AfCFTA requirements. SARB, Treasury, and the FSCA are reforming the foreign exchange (forex) system, liberalising it for trade/investment and updating to the OECD code through new platforms and protocols. New forex system has been tested, OECD-aligned protocols have been drafted and the banking sector is being engaged for operational rollout in Q1-2026.
Is it working?
The reform is advancing, with incremental improvements and strong alignment with global trends. Full liberalisation is expected after 2026, as regional integration deepens. Implementation is close to completion; awaiting further OECD/market feedback.
Actions
The system is becoming more flexible and transparent, supporting trade and investment, though full liberalisation is still in progress. The system is transitioning efficiently with operational guidance in place. OECD benchmarks are to be verified.
Are there plans?
Regulatory changes are being implemented incrementally, with new reporting requirements and stakeholder engagement. The rollout plan in place for phased compliance with legacy conversion of platforms and guidance for banks.
Is it on the agenda?
Forex modernisation is an ongoing SARB and Treasury agenda item, with regular updates and consultations.
Goals
To modernise foreign exchange controls, facilitate trade and investment and align with international standards.
Documents
References
Departments / Govt Institutions
National Treasury Prudential Authority South African Reserve Bank (SARB)
Summary
SARB, National Treasury and the FSCA are reforming the forex system through upgraded platforms, revised protocols and gradual liberalisation. Budget Review 2026 advances this agenda by raising several capital‑flows thresholds (including the single discretionary allowance, cross‑border card transaction and miscellaneous payments limits and the banknote travel allowance) and by removing interest rate caps on inward foreign loans, provided pricing is market‑related and loans are reported to SARB. It also signals expansion of the HoldCo regime to allow asset managers to manage foreign asset portfolios and trade foreign currency instruments from South Africa, contributing to plans for a synthetic financial centre (SCF).
Is it working?
Implementation is progressing smoothly and incremental liberalisation is being framed within a disciplined, risk‑based capital flows regime. The key challenge is calibrating the synthetic financial centre concept and other relaxations so that they facilitate productive investment and on‑shore intermediation rather than encouraging regulatory arbitrage or destabilising flows.
Actions
SARB and Treasury have tested new forex‑system protocols, engaged banks on operational rollout, implemented higher thresholds and removed inward‑loan interest caps, and outlined the planned expansion of the HoldCo regime in Budget Review 2026.
Are there plans?
Authorities plan phased implementation of system changes and liberalisation measures. It is engaging the OECD Code of Liberalisation and design of the synthetic financial‑centre framework, including tax, regulatory and reporting requirements for on‑shore asset‑management HoldCos.
Is it on the agenda?
Forex‑system modernisation is a recurring deliverable in SARB and Treasury strategies and is explicitly advanced in Budget Review 2026’s financial sector update and fiscal strategy discussion.
Goals
Modernise South Africa’s forex regime and systems, liberalising for trade and investment while maintaining robust capital‑flows oversight and aligning with OECD standards.
Documents
References
Departments / Govt Institutions
National Treasury Prudential Authority South African Reserve Bank (SARB)
Summary
Exchange controls are rules governing how money and capital can move in and out of a country. South Africa's exchange control system was introduced in 1961, originally designed to prevent capital flight during apartheid. Although significantly liberalised since 1994, the system retains a "negative bias" (transactions are prohibited unless specifically permitted), which imposes significant administrative burdens on businesses, investors and individuals. On 17 April 2026, NT and SARB published the Draft Capital Flow Management Regulations 2026, proposing to replace the 1961 Exchange Control Regulations in their entirety with a modern, "positive bias" framework where most transactions are permitted by default. Public comment on the draft closes 10 June 2026 and final regulations will be promulgated after NT and SARB review all submissions.
Is it working?
The direction is unambiguously positive and the replacement of 1961 exchange controls is long overdue. However, legal practitioners note the draft may not yet fully deliver the "positive bias" promised. Specific concerns include the treatment of existing crypto asset holdings in rand; mandatory declaration provisions; the non-publication of exemptions (which are critical to enabling the transition); and how existing non-compliance with exchange controls will be regularised. Public comment period closes 10 June 2026 and the quality of industry submissions and the government's response will determine whether the final regulations match the ambition of the announcement.
Actions
SARB and NT have tested new forex‑system protocols, engaged banks on operational rollout, implemented higher thresholds and removed inward‑loan interest caps, and outlined the planned expansion of the HoldCo regime in Budget Review 2026.
Are there plans?
Yes. Draft regulations have been published for public comment and final regulations are expected to be promulgated after the 10 June 2026 comment deadline. Specific exemptions for certain transaction types are being considered separately under draft regulation 23 and have not yet been published. Authorised Dealer (bank) manuals will be updated after promulgation.
Is it on the agenda?
Yes. Finance Minister Godongwana announced this reform in the 2026 Budget Speech - NT and SARB are collaborating on this. SA has formally committed to adhere to the OECD Codes of Liberalisation of Capital Movements, confirmed by NT at Operation Phumelela Lekgotla II (11 May 2026).
Goals
To replace South Africa's outdated, restrictions-heavy exchange control system (which dates back to 1961 and was designed for apartheid-era capital controls) with a modern framework that allows legitimate cross-border capital flows freely while targeting only genuinely high-risk transactions for oversight.
Documents
References
Departments / Govt Institutions
National Treasury Prudential Authority South African Reserve Bank (SARB)
Summary
Exchange controls are rules governing how money and capital can move in and out of a country. South Africa's exchange control system was introduced in 1961, originally designed to prevent capital flight during apartheid. Although significantly liberalised since 1994, the system retains a "negative bias" (transactions are prohibited unless specifically permitted), which imposes significant administrative burdens on businesses, investors and individuals. On 17 April 2026, NT and SARB published the Draft Capital Flow Management Regulations 2026, proposing to replace the 1961 Exchange Control Regulations in their entirety with a modern, "positive bias" framework where most transactions are permitted by default. Public comment on the draft closes 10 June 2026 and final regulations will be promulgated after NT and SARB review all submissions.
Is it working?
The direction is unambiguously positive and the replacement of 1961 exchange controls is long overdue. However, legal practitioners note the draft may not yet fully deliver the "positive bias" promised. Specific concerns include the treatment of existing crypto asset holdings in rand; mandatory declaration provisions; the non-publication of exemptions (which are critical to enabling the transition); and how existing non-compliance with exchange controls will be regularised. Public comment period closes 10 June 2026 and the quality of industry submissions and the government's response will determine whether the final regulations match the ambition of the announcement.
Actions
SARB and NT have tested new forex‑system protocols, engaged banks on operational rollout, implemented higher thresholds and removed inward‑loan interest caps, and outlined the planned expansion of the HoldCo regime in Budget Review 2026.
Are there plans?
Yes. Draft regulations have been published for public comment and final regulations are expected to be promulgated after the 10 June 2026 comment deadline. Specific exemptions for certain transaction types are being considered separately under draft regulation 23 and have not yet been published. Authorised Dealer (bank) manuals will be updated after promulgation.
Is it on the agenda?
Yes. Finance Minister Godongwana announced this reform in the 2026 Budget Speech - NT and SARB are collaborating on this. SA has formally committed to adhere to the OECD Codes of Liberalisation of Capital Movements, confirmed by NT at Operation Phumelela Lekgotla II (11 May 2026).
Goals
To replace South Africa's outdated, restrictions-heavy exchange control system (which dates back to 1961 and was designed for apartheid-era capital controls) with a modern framework that allows legitimate cross-border capital flows freely while targeting only genuinely high-risk transactions for oversight.
Documents
References
Departments / Govt Institutions
National Treasury Prudential Authority South African Reserve Bank (SARB)