Treasury eases exchange controls

Johannesburg - South Africa has eased exchange controls further to allow local institutional investors to invest more assets abroad, the National Treasury said.

In a statement late on Monday, the Treasury said it had raised the limit on the amount institutional investors can take offshore by 5 percentage points.

The Treasury explained that this formed part of a package of measures to respond to surging portfolio inflows.

Retirement funds can now invest 25% offshore, collective investment schemes (unit trusts) 35%, investment managers 35%, and long-term insurers 35% if investment linked and 25% if they are not investment linked.

South Africa has gradually eased exchange controls in recent years and the move may be intended to offset the impact of increased inflows into the country, which has seen the rand gain nearly 30% since the beginning of last year.