The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site. Please see our Subscription Terms and Conditions.


All material subject to strictly enforced copyright laws. © 2021 Euromoney, a part of the Euromoney Institutional Investor PLC.
Treasury

Emerging markets: Capital restrictions and the treasury challenge

Corporates have a variety of tools at their disposal when it comes to getting around regulatory restrictions relating to cross-border liquidity and currency management.

rupee-lock_960.jpg

Capital restrictions that prevent the movement of locally denominated currency offshore are a challenge for corporate treasurers in many emerging markets.

India, Bangladesh, Sri Lanka and Vietnam have the tightest restrictions around currency movements in Asia, while the likes of China, the Philippines, Thailand, Korea, Indonesia, Malaysia and Taiwan are semi-restricted.

In India, for example, overseas money remittance is effectively based on an import payment; and in Taiwan, the regulator sets a limit per entity and each payment has to be checked on a terminal from the regulator to advise the position against this limit.

Sandip Patil 2_400x400.jpg
Sandip Patil, Citi

“In countries where exchange-control regulations restrict the cross-border movement of funds, there are a number of repatriation strategies that can be adopted,” says Sandip Patil, Asia Pacific head of liquidity management services and head of sales for financial institutions, treasury and trade solutions at Citi.

“Examples include intercompany loans, dividend payments, moving management fees to a parent company, royalty payments from subsidiaries, invoice pre-payment on expected future exports, capital repatriations as permitted, and transfer pricing changes to optimize treasury key performance indicators.”

According

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.

SUBSCRIBE ONLINE TODAY

Unlimited access to Euromoney.com and Asiamoney.com

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually

FREE 7 DAY TRIAL

Unlimited access to Euromoney.com and Asiamoney.com, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors

LOGIN NOW

Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree