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ARTICLE · 21 NOVEMBER 2019

A Silver Lining? Relaxation Of The Exchange Control Rules Regarding Loop Structures Announced In The MTBPS

Cliffe Dekker Hofmeyr
Cliffe Dekker Hofmeyr
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Cliffe Dekker Hofmeyr

Cliffe Dekker Hofmeyr

Cliffe Dekker Hofmeyr (CDH) is one of the largest full-service business law firms in South Africa,...

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On 30 October 2019, the Minister of Finance (Minister) tabled the 2019 Medium-Term Budget Policy Statement (MTBPS).

South AfricaFinance and Banking
Louis Botha
Louis Botha

On 30 October 2019, the Minister of Finance (Minister) tabled the 2019 Medium-Term Budget Policy Statement (MTBPS). In his speech on the MTBPS, the Minister was frank in describing the challenges faced by the South African economy and emphasised that our economy must grow faster. Following the tabling of the MTBPS, ratings agency Moody's indicated that South Africa's credit rating would remain at the lowest investment grade level, but changed its outlook from stable to negative.

Amongst all the negativity, however, the Minister announced at least one silver lining, from an investment and regulatory perspective – a further relaxation of South Africa's exchange control rules aimed to "...promote investment and reduce unnecessary burdensome approvals". To this end, the Minister announced that "rules on active currency hedging, loops, and mortgages for individuals working in South Africa will be reformed. To support regional integration, the HoldCo regime will be

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