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Central Bank outlines measures to relax exchange control arrangements

Bahamian business owners will soon be able to benefit from a series of measures by The Central Bank of The Bahamas to relax exchange control arrangements that cover current account transactions and certain capital controls. These changes are expected to take effect on February 1.

In a statement, the regulator pointed out that the limit for commercial imports of goods and services has been increased to $1 million from $500,000. “For larger import payments, businesses may still apply to the Central Bank for annual approval limits that can be drawn down in stages at commercial banks,” the regulator noted.

Also, for travel-related expenses the allowance limit has been increased from $10,000 to $15,000 per individual per travel.

“The 2018 approach to liberalization continues to prioritize preservation of the economy’s capacity to maintain adequate supplies of foreign exchange for trade-related payments, and to ensure safeguards around the stability of the Bahamian dollar fixed exchange rate,” the bank stated.

“The trade-related measures are intended to further reduce the need for direct Central Bank approvals for international business payments.

“The capital account measures target a prudent balance, while promoting more economic dynamism through sustainable and stable financial flows.”

In terms of financial and investment transactions, the regulator stated this set of reforms can impact Bahamians or Bahamian businesses, starting with the reduction in premiums on investment currency purchases and sales to five percent and 2.5 percent, from current levels of 12.5 percent and 10 percent.

“While there are some exceptions, residents are required generally to fund capital market and other investments outside The Bahamas with foreign exchange purchased through the investment currency market,” the Central Bank noted.

The regulator also noted that Bahamians may now fund residential purchases abroad of up to $0.5 million at the official exchange rate. “The properties would have to be for their direct or immediate family usage.”

The Central Bank said it will continue to “closely monitor” the economy’s adjustment to these reforms.

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