South Africa relaxes currency laws

Press, 26 January 1979, Page 11

South Africa relaxes currency laws

INZPA-Reuter Cape Town: South Africa is cutting its] i currency, the rand, adrift | (from the United States dol-l liar, and relaxing its foreign! [exchange rules to encourage! investment from abroad. The government has accepted recommendations of a year-long Commission of Inquiry which amount, to a major reform of the couni try’s foreign exchange sysiten and policy. I The new measures, to be I introduced today, would 'stimulate foreign investment [in South Africa, and lead to economic growth. Foreign, industrialists andi ! investors thought that the; (old investment and foreign; 'exchange rules, introduced--after black unrest in 1960 to| prevent “fright money” from! Ileaving South Africa, had; become a major obstacle to! (investment.

The rand, which was pegged at a middle rate of SUSI.IS to the rand will be allowed to float, but the Reserve Bank will intervene to regulate the rands international value by buying and selling dollars. The foreign exchange and stock markets were closed yesterday and today to prevent speculation. On Friday the rand will initially be quoted at the old rate. The securities rand, the currency which has been used since 1961 by foreigners for share dealing on the Johannesburg stock exchange, will be extended in scope and ' renamed the financial rand. There will be fewer re-) [strictions on foreigners repatriating profits, and South | Africans will find it easier-: to invest abroad.