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Number 4: Exchange rates and exchange control |
Introduction
An exchange rate is the rate at which the currency of one country is exchanged for the currency of another country. For instance, if one goes to an authorised dealer in foreign exchange and purchases one United States dollar by paying R7,00 then the exchange rate of the rand against the dollar is R7,00 for one dollar.
The main purpose of exchange control is to:
- ensure the timeous repatriation into the South African banking system of certain foreign currency acquired by residents of South Africa, whether through transactions of a current or a capital nature; and
- prevent the loss of foreign-currency resources through the transfer abroad of real or financial capital assets held in South Africa.
This is the fourth in a series of fact sheets on the South African Reserve Bank, compiled by the Research Department: Information Division and distributed by the Executive Management Department: Communications Unit.
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