Manual exchange in the context of foreign exchange refers to the physical buying and selling of foreign currencies, or the processing of exchange transactions through manual data entry, paper-based documentation, and fixed rates determined by a central or commercial bank, as opposed to an automated algorithmic system.
Key Characteristics
Physical Transactions: Also referred to as manual foreign exchange activity, this encompasses the exchange of physical cash, banknotes, or traveller's cheques between parties.
Regulatory Oversight: Such operations are subject to stringent regulation by the relevant central authorities including the Bank of Central African States (BEAC) in the CEMAC region to ensure compliance with applicable anti-money laundering (AML) legislation.
Spread and Limits: Exchange houses or bureaus de change in Cameroon and CEMAC operating manually are required to display buying and selling rates and maintain competitive spreads.
Software and Travel Systems: In the travel and accounting industry of Cameroon and CEMAC, the term "manual exchange" refers to the manual construction, calculation, and ticketing of exchanges in circumstances where automated tools are unable to process a complex itinerary, or to the manual override of a system's default currency rate.
Common Use Cases of Manual Exchange Bureaus in Cameroon and CEMAC
Retail Bureaus de Change: They exchange physical cash for travel or business purposes as conducted at authorized local exchange branches or currency exchange booths.
Business Travel Allocations: Companies set up manual foreign exchange conventions to provide staff with cash allocations or per diems for international travel and trips.
Credit and micro-finance institutions, post offices and exchange offices in Cameroon and CEMAC are authorised to carry out manual foreign exchange operations in accordance with the provisions of these Regulations.
However, in the context of transactions to purchase foreign currency from customers, credit institutions may grant sub-delegations to certain entities, in particular hotels, travel agencies, airport shops and casinos, which, because of their activities, receive payments in foreign currency from foreign travellers.
Credit institutions shall notify, the Central Bank of the sub-delegations granted to eligible entities.
Currency exchange offices are approved by the Ministry in charge of currency and credit for the exercise of manual exchange activity, after approval by the BEAC.
The application for approval shall be submitted to the Ministry of Currency and Credit, accompanied by a file, the constituent documents of which shall be laid down by Central Bank Instruction.
Exchange offices shall effectively start their manual exchange activity within one year of the date of notification by the Ministry in charge of currency and credit of their approval, failing which it shall lapse.
BEAC maintains and updates the list of approved exchange offices.
The sub-delegated institutions of the credit institutions carry out, on a subsidiary basis, the purchase of foreign currency for cash. They may not, under any circumstances, sell foreign currency.
Sub-delegated institutions sell to the delegated credit institutions every 15 days the currencies collected in the course of their business.
Credit institutions shall ensure that their subdelegates comply with the manual exchange provisions of these Regulations and subsequent texts and shall report annually to the Central Bank and COBAC.
Entities authorised to carry out manual foreign exchange operations shall be required to:
- Serve their customers within the limits of their foreign currency availability and the currency allocation thresholds set by these Regulations;
- Check the conformity of the supporting documents presented by customers;
- Report to the Ministry in charge of currency and credit, the Central Bank and COBAC, in accordance with the procedures provided for in these Regulations and in subsequent texts.
The BEAC defines by Instruction the conditions and modalities for carrying out manual foreign exchange activity.