To the surprise of many, South African Finance Minister Trevor Manuel and the South African Reserve Bank relaxed their hold on exchange controls in the annual Budget Speech in February 2008.

Previously, South Africans who travelled out of the country were entitled to the following allowances:

R160 000 per individual (12 years and older) per annum. R50 000 per individual (under the age of 12) per annum.

The new allowances are:

R500 000 per individual (18 years and older) per annum. R160 000 per individual (under the age of 18) per annum.

It is important to note the new allowances include all the following: travel allowance, maintenance payments, gift allowance and donations. This means that you may choose to utilise one or all four of the above transactions, but you may not exceed your allowance per annum.

Travelex Retail and FX Africa Chairperson Sean Maloney says the relaxation of foreign exchange controls “is an incredibly exciting development that has far-reaching consequences”.

“It’s increased our turnover dramatically already since the announcement,” adds Maloney. “There are a lot of people who want to take out more than R160 000 a year; they want to take their full allowance of R500 000. It begs the question, is there really foreign exchange control in South Africa anymore? Only maybe 0.5% of people can afford to take that much out each year, so this basically means there are no foreign exchange controls for 99.5% of the population.”

He adds that in his opinion, this is an excellent move for the South African economy, and he thinks that it will add to further investment here. “The fact is, people want to invest money where they can get it out again,” he points out. “This is a good move all round.”

Maloney says that Travelex Retail Exchange and FX Africa can facilitate foreign exchange for anyone who wishes to use their allowance, whether it be for travel or another reason.