Summary of Regulations Affecting the Offshore Use of Currencies in Selected Asian Countries
(as of December 31, 2000, unless indicated otherwise)
|Nature of the transaction||Indonesia1||Korea||Malaysia||Philippines||Singapore||Thailand|
|Imports of domestic currency||Customs declaration req. above; Rp 5 mil.; customs declaration and prior approval req. from BI above Rp 10 mil.||Notification req. to customs office to import above $10,000||RM 1,000 per person limit for travelers in me form of notes and travelers checks; approval requirement for amounts above this limit and by other means||Prior authorization > p10,000 in banknotes, checks, coins, money orders, other bills of exchange drawn in pesos||Free||Free|
|Exports of domestic currency||Customs declaration req. above Rp 5 mil.; customs declaration and prior approval req. from BI above Rp 10 mil.||Permission req. from BOK to export above $10,000||RM 1,000 per person limit for travelers in the form of notes and traveler’s checks; prior approval for exports above this limit and by other means||Prior authorization > p 10,000 in banknotes, checks, coins, money orders, other bills of exchange drawn in pesos||Free||B50,000 limit per traveler (B500,000 for Vietnam or bordering countries)|
|Use of domestic currency in settlement of trade transactions||Permitted as long as rupiah accounts of the trading partners are maintained with onshore banks||Prohibited, except for current transactions provided remittances are made in foreign exchange||Prohibited||Prohibited for payment of export receipts, except for exports to ASEAN and provided no central bank intervention for clearance||Free||Free|
|Nonresident holding of or transfers between/ from domestic currency accounts||Permitted to open rupiah accounts in onshore banks. Rupiah transfers from residents’ or nonresidents’ accounts to residents are permitted as long as rupiah accounts are maintained with onshore banks. Rupiah transfers from residents’ or nonresidents’ accounts to nonresidents are prohibited either when nonresident’s rupiah account is in offshore banks (regardless of the underlying transaction), or in onshore but there is no underlying transaction.||Free||Prior approval for transfer of funds between nonresident ringgit accounts in Malaysia and for uses of funds other than permitted purposes-Conversion and repatriation of ringgit funds are subject to payment of levy on profits from portfolio investments retained in the country for less than one year||Free to withdraw, but conversion into foreign currency allowed up to certain limits and subject to certain restrictions||Free||Approval for conversion for funds not originating from abroad, not transferred from other nonresidents accounts, or not borrowed from banks.|
|Resident domestic currency deposits abroad||Prohibition of resident banks to deposit rupiah funds in offshore banks; nonbank residents are not regulated.||Notification requirement to BOK||Prohibition of residents to hold ringgit accounts offshore||Free for both banks and nonbanks||Free||Prohibition of resident banks’ placement and transfer of baht funds offshore, to hold claims on nonresident branches. Nonbank residents’ holding deposits offshore prohibited.|
|Domestic currency lending from residents to nonresidents||Domestic banks are prohibited for financial or commercial purposes from lending to nonresidents, including their offshore offices. Resident entities are prohibited from granting commercial credit to nonresident entities.||Approval requirement for commercial and financial credits in won above W 1 billion a borrower||Banks are allowed to extend ringgit credit facilities to foreign global custodian banks and stock-broking companies only up to an intraday limit of RM 200 million and overnight limit of RM 10 million for firm committed trade on KLSE. Prior approval for extension of credit facilities above RM 200,000 from resident banks to other non-residents. Permission requirement for other nonbank residents to lend ringgit to nonresidents above RM 10,000.||Prohibition (reinforced in December 1999) of banks to lend peso to nonresidents. Commercial credit from nonbank residents no longer requires approval if loans serviced by FX obtained out of the banking system; financial credit requires prior approval except those lent by expanded foreign currency deposit units.||Consultation requirement with MAS for financial institutions to extend S$ loans to nonresidents above S$5 million except pre-approved economic activities in Singapore, and for the hedging of exchange and interest rate risks associated with these activities; nonbank residents unrestricted.||Prohibition of direct baht loans (i.e., any form of baht lending except through forwards, swaps, or options) by financial institutions to nonresidents, regardless of the existence of collateral or an underlying transaction reintroduced in October 1999 after the prohibition of direct lending with no underlying transaction was replaced by a B50 million limit in end January 1998). Nonbank residents prohibited to extend financial credit to nonresidents in baht.|
|Banks’ derivative transactions in domestic currency w/ nonresidents||US$3 million limit (per person and per bank a day) on derivative transactions (forward sell, swap sell and option for sell forex call or buy forex put against rupiah) with nonresidents, except for hedging of portfolio investment and trade related transactions||Controls on all derivative transactions by nonresidents involving the use of won-denominated financing.||Prior approval for nonresidents to buy/sell forward RM against foreign currency, except purchasing outright forward RM to settle trade on the KLSE for <3 work days for firm committed trades. Foreign stockbroking companies and foreign global custodian banks can enter into swap contracts with resident banks for committed purchases on KLSE upto 3 work days.||Prior clearance for all forward transactions to purchase FX from nonresidents and for all forward transactions to sell FX to nonresidents (including offshore banking units) with no full delivery of principal (through NDFs).||MAS consultation requirement for all banks transacting with non-residents in Singapore dollar financial derivatives; no controls for OTC interest rate derivatives and collateralized repos.||An outstanding limit of B50 million on financial institutions’ forward sale of FX and lending baht through swaps and forwards to nonresidents with no underlying trade and investment activity in Thailand. Financial institutions not permitted to buy FX from nonresidents for same day and next day settlement for non-underlying transactions (for underlying transactions, there are approval, reporting or document requirements above certain limits).|
|Domestic currency lending to residents from nonresidents||Periodic reports and authorization requirements for some type of loans|
Nonresidents’ rupiah transfer to residents permitted except when the resident account is in offshore banks.
|Permission requirement of MOFE||Prohibited. All payments related to a guarantee must be made in foreign currency||Prior approval/registration for short-term trade related foreign loans contracted by nonbank residents; no prior approval for financial loans by resident private borrowers from offshore sources||Free||Free, provided repayment receives approval of Bank of Thailand.|
|Nonresidents issue/sale of domestic currency assets locally||Resident banks are prohibited to purchase rupiah securities issued by nonresidents.|
Nonresidents are prohibited from issuing money market securities in Indonesia.
|Permission requirement for issue of won-denominated securities with maturity less than one year; declaration requirement to issue securities with maturity > 1 year||Prohibition it) issue domestic currency assets (bonds and debt securities) locally; requirement to sell ringgit assets through authorized institutions.||Generally prior approval or license requirement to issue all peso-denominated instruments in international capital markets and bonds and debt securities||For bond and debt securities, prior consultation with MAS if proceeds not to be used for preapproved economic activities in Singapore. Proceeds must be converted and swapped into foreign currency for all uses outside Singapore||Prior approval requirements except for capital market securities. Banks are prohibited to purchase nonresident baht securities.|
|Nonresidents’ purchase of domestic currency assets locally||Nonresidents are allowed to purchase without limit shares issued in the Indonesian capital market. Quantitative limit for derivative securities and collective investment securities.||Free, except for derivative instruments involving won lending to nonresidents, which is subject to controls||Requirement to undertake all purchases of RM assets via authorized institutions; nonresidents need prior approval to sell ringgit forward against foreign currency with resident banks (nonresidents can enter into outright forward contracts to buy ringgit, and foreign stockbroking companies and global custodian banks into swap contracts with resident banks, for committed purchases on KLSF upto 3 work days).||Registration with BSP or a designated custodian bank for capital and debt securities if repatriation of earnings needs FX purchased from the banking system||Restricted only for derivatives securities that would involve S$ lending to nonresidents||Limits for capital market securities and derivative securities involving baht|
|Residents’ issue/sale of domestic currency assets abroad||Limits, approval requirements, maturity restrictions for money market securities; the issuance of securities abroad is subject to regulation pertaining to receipt of offshore loans||Notification requirement for bond and other securities with maturity more than one year; permission requirement for bond and other securities with maturity of one year or less||Residents are not permitted to issue domestic currency assets offshore||Generally registration or prior approval requirements; no restrictions for money market or collective investment securities||Free||Approval requirements for capital, debt and derivatives securities; prohibition sale/issue of money market instruments in general|
As of end-January, 2001.