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Appendix. Exchange Rate Restrictions and Exchange Rate Arrangements

Author(s):
Stella Kaendera, S. V. S. Dixit, and Nabil Ben Ltaifa
Published Date:
December 2009
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GhanaKenyaNigeriaRwandaTanzaniaUgandaZambia
CurrencyCediShillingNairaFrancShillingShillingKwacha
Date of acceptance of Article VIIIFebruary 1994June 1994Article IVDecemberJuly 1996April 1994April 2002
Classification of Exchange rate Arrangements
De JureFloatingFloatingManaged floatingManaged floatingfloatingFloatingFree floating
De factoFloating (managed floating based on old methodology)Floating (managed floating based on old methodology)Other managed arrangement (Jan. 09) (a managed floating with no predetermined path for the exchange rate based on old methodology)Other managed arrangement or also stabilized arrangement (Feb. 09) (a conventional peg based on old methodology)Floating (managed floating based on old methodology)Floating (managed floating based on old methodology)Floating independently floating based on old methodology)
Official exchange rate and the foreign exchange marketDetermined in the interbank market, on basis of average rates reported by Authorized dealers (ADs).



Member of WERM II of the WAMZ; yet to implement its requirements.



ADs may undertake forward foreign exchange transactions.
Determined in the interbank market.



The central bank participates in the foreign exchange market to build reserves and smooth out short-term exchange rate fluctuations.



Commercial banks are authorized to undertake forward foreign exchange transactions. Approval of central bank is required.
Determined on basis of central bank auctions held twice a week; interbank rate is freely negotiated among ADs; an Exchange bureaus’ rate and a parallel market rate are also available.



ADs may undertake forward foreign exchange transactions subject to prudential limits provided transactions are related to trade in GS.
The official exchange rate set by the central bank using data from the interbank market, retails prices, and the previous day’s reference price. Exchange rate auctions abolished in mid-2007, and ADs freely set exchange rates in transactions with their clients.



The forward exchange market has been authorized, but not yet operational.
Determined in the foreign exchange market; frequent and large interventions by the central bank influence the market rate.



ADs may undertake forward foreign exchange transactions provided they are related to trade in GS.
Determined in the foreign exchange market; central bank intervenes in shallow foreign exchange market to smooth short-term fluctuations.



ADs (banks) may undertake forward foreign exchange transactions.
Determined in interbank market based on average of primary dealers’ rates; central bank intervenes in exceptional circumstances with primary dealers, and may also other banks.



ADs may undertake forward foreign exchange transactions.
Monetary PolicyInflation targeting frameworkMonetary aggregate targetMonetary aggregate targetMonetary aggregate targetMonetary aggregate targetMonetary aggregate targetMonetary aggregate target
Restrictions on External transactions and payments Current transactions
Import restrictionsStandard documentationYes, standard documents and preshipment inspectionYes, standard documents and destination inspectionYes, standard documents, import licenses, and import declaration for imports above US$ 20,000.Yes, standard documents, plus provisional classification valuation report for imports exceeding US$ 5,000.No, except for goods in a Negative list.No; license required only for trade in petroleum products
Export proceeds
Repatriation req.Yes (60 days)NoYes (90 days)Yes (90 days)Yes (unspecified)NoNo
Surrender req.Yes, for Cocoa and a proportion of gold.NoNo
Capital transactions
Controls on:
Capital transactionsYesYesYesYesYes, approval by central bank is required for all capital outflows.NoNo
Capital and money market instrumentsYes, restrictions apply to acquisition of stake in banking sector; purchase of market instruments allowed for maturity over 3 years.Yes, regulations governing securities of a participating nature apply; central bank approval required for certain operations.Yes, controls apply to purchases of nonresidents of debt instruments with maturities of more than one year.Yes, capital market not yet operational. Non residents are authorized to invest in government securities.Yes, restrictions apply to investment in stock market, and nonresidents not permitted to hold government securities.NoNo
Credit operationsNoNoYesYes, authorized with limited restrictionsYesNoNo
FDIYes, (not on liquidation of FDI)NoYes, restrictions on repatriation of capital proceeds.Yes, repatriation of investment capital governed by investment code.Yes, repatriation of capital income subject to audit and tax clearanceNoNo
Provisions to banks and institutional investorsYesYes, (to banks only)Yes, (to banks only, institution, investors not regulated)YesYesYes, (to banks only)

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