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Article08 Jul 2024

Moving Beyond “Trapped” Cash

When is cash really trapped? Often this occurs in countries with insufficient hard currency reserves, resulting in inability to remit funds offshore.  While rare, current examples include countries like Angola, Argentina and Egypt.

More often, this perceived challenge in a group of operating countries is an opportunity to navigate across varying local regulations, requirements, and “realities” to solve for ways to extract or optimize funds.

The Client Advisory Group recommends using the following framework to manage cash in countries with varying restrictions:

• Distinguish unrestricted, semi-restricted, restricted, and truly trapped cash countries

• Quantify the amount of cash in each category of countries

• Be aware of certain countries that have currency conversion constraints

• Understand the company’s business and trading model

• Determine the company’s finance and treasury model

 

Read the full report here

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