Problems relating to Trade and Investment on South Africa

12. Exchange controls
Issue	Issue details	Requests	Reference

(1) Rigid and Delayed Licences and Approvals on Advance Booking in Foreign Exchange

- The large fluctuation margin between rand and Japanese yen makes it difficult to maintain the stable retail price. Forward booking of rand in foreign exchange is difficult to make due to the severe restrictions on licences and approvals.
- Due to the wide margin of Rand fluctuations, foreign exchange risk control takes a lot of work.

- It is requested that GOSA deregulates restrictions on licences and approvals for rand forward booking in foreign exchange.

- Foreign Exchange Contract Act

(2) Rapid Exchange Fluctuations

- Radical exchange fluctuations prevail. As it stands, member firm's subsidiary (MFS) benefits from exchange gain on a direct export transaction in yen. Nevertheless, negotiation for raise in price is difficult. However, MFS runs on a thin margin, so that if the exchange rate swings toward appreciation of Yen, it will instantly show operational loss: such is the severity of the fluctuation band.

- It is requested that GOP takes step to:
-- stablise foreign exchange fluctuations, and
-- holds the fluctuation band within a few percents in 6-months.

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