South Africa foreign exchange control move positive: Standard Bank

The South African Reserve Bank's easing on regulations on currency controls will allow investors to better manage market volatility, Standard Bank said on Sunday. The central bank has relaxed administration on exchange controls for hedging on over-the-counter trades.
The move, including losing the requirement to provide documentation within 14 days to justify the need for foreign currency, applied to contracts of six months or less. Standard Bank, South Africa's largest bank by assets, said the relaxation would assist in further developing the country's financial markets.
"This liberalisation represents significant progress for the local foreign exchange market, but it is not meant to encourage speculation," Standard Bank director for foreign exchange Richard de Roos said in a statement.
"Entry into the foreign exchange market, although now entailing less administration, will still necessitate a direct underlying exposure or embedded currency risk." He said dynamic hedging would allow for servicing of all clients' hedging requirements, including some transactions that had previously been denied. It would allow hedging on all direct underlying exposures, active hedging on all short-term commitments and reduced administration.