Extending Boundaries: Adjustments To South African Exchange Control Limits And Powers

The Financial Surveillance Department of the South African Reserve Bank (“FinSurv”) recently published a suite of draft exchange control circulars for comment, giving effect to the Minister of Finance’s 2026 Budget Speech announcements as referred to in Exchange Control Circular No. 3/2026.

The drafts propose certain relaxations and technical amendments to the Currency and Exchanges Manuals applicable to Authorised Dealers (“ADs”) and Authorised Dealers in foreign exchange with limited authority (“ADLAs”), including higher individual and transactional limits and additional operational discretion for ADs and ADLAs.

We highlight below some of the key changes proposed in the draft circulars below:

1. Increase in the single discretionary allowance

The draft circulars amend the treatment of the single discretionary allowance (“SDA”) across both the AD and ADLA Manuals. The definition of SDA is amended to provide for ZAR2 million per calendar year for natural persons aged 18 and older (previously ZAR1 million). The SDA may be used for any legal purpose abroad, including investments, non-cash gifts and local debit and/or credit card usage abroad, subject to correct reporting classification. Current transfers above ZAR2 million remain subject to FinSurv verification and approval, and capital transfers above SDA limits continue to be governed by the ZAR10 million foreign capital allowance and the relevant provisions of the AD Manual. Notably, in respect of transactions effected though ADLAs exceeding an aggregate value of ZAR50,000, including travel and study allowances and monetary gifts to non-residents or residents temporarily abroad, ADLAs are required to obtain and verify the source of funds.

2. Cash export limits

The draft circulars address banknote (i.e. cash) limits for both ADs and ADLAs, implementing a substantive increase. For residents, foreign nationals, non-residents and visitors, the export limit for Rand notes is increased from ZAR25,000 to ZAR100,000 per person when leaving South Africa. The corresponding import restriction is amended so that these parties may not import Rand notes or banknotes of other Common Monetary Area (“CMA”) members in excess of an aggregate value of ZAR100,000 per person. CMA residents travelling overland to and from other CMA countries through a Southern African Development Community (“SADC”) country may carry up to ZAR100,000 in Rand notes per calendar year.

3. Credit and debit card limit for foreign payments

The amendments to the AD Manual provisions governing small foreign currency payments by South African residents using credit and/or debit cards include an increase in the permissible limit per transaction from ZAR50,000 to ZAR100,000. These payments include imports over the internet, services, subscriptions and other small foreign currency transactions effected by card. The anti-avoidance rule is retained and updated: any singular transaction exceeding ZAR100,000 may not be split to circumvent the new per-transaction limit.

4. Local settlement in foreign currency between residents – CFC accounts

The amendments provide additional delegated authority to ADs in respect of local settlement in foreign currency between residents over Customer Foreign Currency (“CFC”) accounts. ADs may approve the extension or renewal of authorities previously granted by FinSurv for local settlement in foreign currency between residents over CFC accounts, except where state-owned entities are involved (such requests must still be referred to FinSurv). ADs may only process such extension or renewal requests where they are satisfied that the circumstances underlying the original FinSurv authority remain unchanged, other than any adjustment to limits, and that all the terms and conditions of the previous authority have been fully complied with.

5. Borrowing abroad by residents – interest rate criteria

The amendments address inward foreign loans and foreign trade finance facilities availed of by residents from non-residents. Existing prescriptive interest rate thresholds are removed, and ADs may now approve inward foreign loans and foreign trade finance facilities, provided the interest rate is market related or normal in the trade concerned. All other existing criteria applicable to such foreign borrowings remain in force, including minimum tenor, prohibition on foreign sinking funds, and fee limitations.

FinSurv will continue to monitor inward foreign loans and foreign trade finance facilities and the administration of the Loan Reporting System. ADs are required to ensure accurate and comprehensive reporting for foreign debt statistics and repayment profiles. For related-party loans, ADs must have regard to SARS Interpretation Note No. 127 (17 January 2023) on intra-group loans, which sets out transfer pricing and interest limitation rules for cross-border loans between connected persons.

6. Merchanting trade transactions

The amendments streamline settlement requirements for merchanting transactions by residents, with the aim of simplifying ADs’ administration. The previous differentiated time-lags (60 days for trade with African countries; 30 days for other countries) are replaced with a single standard requirement: ADs may allow merchanting trade transactions provided the time-lag between payment to the foreign supplier and receipt of funds from the foreign importer does not exceed four months.

7. Miscellaneous transfers

The amendments increase various thresholds in the AD Manual applicable to “miscellaneous” payments abroad by South African business entities and individuals. Refunds involving related parties may be effected up to a total value of ZAR200,000 per calendar year, provided the AD is satisfied the transaction complies with transfer pricing guidelines and suitable documentary evidence is obtained and reviewed. Where a resident must regularly make payments in cash to or on behalf of non-residents, ADs may accord a foreign currency cash float not exceeding the Rand equivalent of ZAR200,000 at any one time, with the float replenished only against documentary evidence of utilisation.

Core insights

These draft circulars collectively signal a relaxation and modernisation of selected exchange control limits and an incremental delegation of operational responsibility to ADs and ADLAs, particularly in relation to SDA usage, cash and card limits, foreign borrowing adjudication, merchanting transactions and miscellaneous transfers. Clients should review their existing policies, customer disclosures and systems in anticipation of the final circulars and consider any changes required to ensure compliance once the amendments become effective.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.