Mr. Denton Rarawa, the Governor of the CBSI says the decision by the Central Bank to relax Exchange Control requirements on certain foreign exchange transactions through the commercial banks, will reduce the cost of doing business in Solomon Islands.In announcing the changes the Governor says the CBSI Board, at its meeting on December 9th, 2010 endorsed changes to three Exchange Control limits enforced through the commercial banks.
First, the approval limit for application to purchase foreign currency for trade and services payments through the commercial bank is to increase to $100,000, from $50,000. Applications for amounts above $100,000 will need to be submitted to CBSI for approval in the normal way.
As a result of the increase on commercial bank's authorized limits, the limit on imports of goods under "Goods on Credit" below SBD$100,000 will no longer require exchange control clearance from CBSI for custom clearance and payments. Imports of "goods on credit" above $100,000 will require CBSI clearance in the normal way.
Secondly, the limit on foreign exchange holdings that each commercial bank can hold overnight as authorized dealer is to increase to SBD$10 million from SBD$5 million.
Thirdly, the trading limit on US dollar transactions for the authorized dealers has been reduced to 2 per cent spread.
Governor Rarawa says the current limits on transactions for personal remittances, travel, immigrants and sustenance will remain unchanged.
Applications for Capital Payments such as Loan Repayments (P+I), Dividend, Profit repatriation, Investments fund, Capital repatriation, also remain unchanged.
The Changes to the Exchange Control limits will be effective as of Wednesday 15 December 2010.