Published: Tuesday October 21, 2008

BARBADOS is moving quickly to liberalise controls on the movement of foreign currency in and out of the country, in order to ease regional transactions.

As a result, the Central Bank said yesterday it would allow commercial banks and authorised foreign currency dealers to grant CARICOM Single Market & Economy (CSME) residents the funds required for settling-in purposes, such as purchase of items such motor vehicles, furniture and equipment.

The facility does not allow for the purchase of real estate.

Moreover, companies operating in Barbados and controlled by CSME residents are now allowed a maximum of $1 million annually. The exception again is for acquisition of real estate.

In what could be described as an important move in the process, the Central Bank also announced that it would allow Barbadian residents who earn foreign exchange to keep some of that money and not have to hand it over to a bank or authorised dealer.

Apart from attempting to level the playing field between foreign residents and Barbadians, the Central Bank said it hoped the move would encourage Barbadians holding foreign currency in accounts overseas to return that money to Barbados.

Regarding the impact of the move on the island's foreign reserves position, the bank said it was "mindful of the weak international environment and has therefore decided to implement only such measures as might facilitate the private sector, without significant risk of adverse impact on the foreign reserves".

Additionally, the bank said authorised dealers could continue to open foreign currency accounts funded by non-residents and Barbadians and CARICOM nationals permanently living outside Barbados.

In addition, the Central Bank said non-residents could continue to place the full amount of funds brought into Barbados on their foreign currency accounts.

However, CSME residents living in Barbados for three years will be treated as residents for exchange control purposes and will be subject to surrender requirements.


Source: Nation Newspapers
http://www.nationnews.com/story/308292328955798.php