SA to lower cost of transfers

Cape Town - The Reserve Bank will make an effort to reduce the high cost of currency transfers between South Africa and its neighbouring states after it has been revealed that this country has the highest currency transfer rates worldwide.

Dave Mitchell, head of the bank's department of national payments says the high transfer costs we recently discussed at a World Bank international conference on payment systems.

The World Bank has a database reflecting currency transfer rates from 14 countries to 72 receiving countries.

The database indicates that South Africa occupies four of the top five positions for the most expensive rates. Transfers from South Africa to Zambia, Malawi and Mozambique take the top three places. The fourth most expensive route for sending money is from Germany to China. South Africa also takes first place for currency transfer charges to Botswana.

Mitchell says the central bank will work with other banks and financial institutions to reduce the costs.

To pay, for instance, R100 to send R500 to Botswana, is excessive. He reckons that among the reasons for the high rate are the cost of compliance with financial information requirements, exclusivity agreements between companies transferring money, and exchange control.

According to the World Bank, transfers by migrant labourers across borders this year will decline by about 5% to $290bn, owing to the international credit crisis.

- Sake24.com

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