Cape Verde Foreign Exchange

Cape Verde Escudos only obtainable in the islands

The local currency is the Cape Verde Escudo, which has pretty pictures of sailing boats. It is pegged at 11O Cape Verde escudos to the Euro and so represents about 146 to the pound sterling. The Cape Verde escudo has been stable against the euro for a decade but high interest rates and controls are needed to prop it up to prevent it depreciating. Here are the rules on withdrawing money.

Rules on withdrawing Cape Verde money

Euros put into a Cape Verde bank account by bank transfer (not cash) can only transferred

1) to another Euro or Escudo Account in Cape Verde or

2) To a foreign bank account for amounts less than €9000

3) to an Euro or any other currency account outside Cape Verde, by producing an invoice for goods purchased if the amount exceeds €9.000.

Euros placed into an account in cash

1). Only amounts paid in in notes can be taken from your account again in cash.

Foreign exchange and controls

Recognizing the importance of stability in exchange operations to balance external accounts and maintain price stability, Cape Verde’s exchange policy initially focused on two key components: rigorous control of operations with the outside, and maintaining the stability of the exchange rates to ensure that it reflected the real value of the national currency. The exchange rate was calculated on the basis of a group of currencies from Cape Verde’s principal commercial partners. Given the high degree of foreign components in Cape Verde’s economy, the exchange rates was sensitive to internal inflation.

After Cape Verde liberalized its exchange operations, it was necessary to reformulate the country’s entire exchange policy. In 1998, Cape Verde signed an Exchange Cooperation Accord with Portugal, which establishes a fixed parity between the Cape Verde Escudo with the Portuguese Escudo, and consequently later the Euro (Resolution nº 81/V/98 of 11 May). The rate of exchange is 1 Euro to110.265 CVE. Under the terms of the Accord, Cape Verde commits itself to adopting macroeconomic guidelines that safeguard this fixed parity, which has repercussions on the definition and execution of budgetary and monetary policies.

With respect to foreign exchange controls, the system in effect facilitates 100% transfer of foreign investment capital as long as the foreign investor is registered as such in the Bank of Cape Verde and is authorized by the Minister of Finance and Planning to carry out foreign investment operations (Law nº 89/IV/93 of 13 December). There are no restrictions on opening bank accounts in foreign currency, and BCV’s authorization is not required to obtain currency to import merchandise valued at up to 5,000,000.00 CVE (Decree Law nº 25/98 of 29 June). Interest payments on loans or credits previously authorized by the same institution, in any amount, do not require prior authorization. BCV may, however, require the transfer of capital arising from the sale, liquidation or dissolution of an enterprise to be effectuated in quarterly installments if transferring the sum in full is likely to cause serious disturbance to the Balance of Payments (Foreign Investment Law No. 89/IV/93, published in Official Bulletin 13/12/93) (see also Section VI.2 (f)).

Relations with International Monetary Fund

On April 4, 2002, the Executive Board of the International Monetary Fund approved a three-year arrangement for Cape Verde under the Poverty Reduction and Growth Facility (PRGF) for approximately $11.6 m. In December 2002, the IMF completed the first review of Cape Verde’s performance under an economic programme supported by the PRGF. The IMF commended Cape Verde on its significant progress in stabilizing public finances, regularizing domestic and external arrears, rebuilding international reserves, and continuing its structural reform agenda.

It is not a convertible currency so that you cannot lawfully take it out of the country and you cannot change it abroad. Cape Verde banks do not provide credit cards. Any currency export requires special permission.

D from Birmingham had his letting income frozen

"I took advice (groan!!!!!) and opened a Cape Verde bank account. My rent has been paid into it, Now it transpires that it is NOT POSSIBLE to transfer money OUT of Cape Verde bank back to UK. Easy as falling off a log to transfer money INTO a Cape Verde bank account... I should know I`ve transfered enough to pay for the apartment. But Not Out. Apparently the only way I can get my money is to go to Cape Verde and go into the bank... and even then, apparently, there is a €9,000 limit. So I now have a pile of euros sitting in an account in Cape Verde and no way of getting it. If anyone has managed to find a way to get their money out of Cape Verde I'd love to know.... but it looks like other people are having similar problems to me, so I`m not optimistic. Is it just me who didn`t realise this before I bought????"

D from London got caught out

"DO NOT PAY ANY MONEY INTO A BCA ACCOUNT unless you understand the following. Its a lot easier to put it in than get it out!!!!! You cannot transfer money out of CV to any othe european account by phone or online. You can only get your money by physically going into the bank. So if you are happy to leave your money in the BCA and spend it when you are in SAL, fine, if you ever want to access your money from otuside CV, do NOT pay your rent in. Boy, do i wish someone had told ME this before I ended up with thousands of euros stuck in an account I cannot access!!!!"

Money Transfer for property purchase or sale

British people buying abroad could be losing £900m per year through poor exchange rates and inflated bank charges, according to currency specialists. Buyers neglect to secure a good rate of exchange at the time of purchase. A typical property purchase of£250,000 could cost £10,000 more through a High Street Bank rather than a money broker.