This ensured the free movement of funds, emanating mainly from the United Kingdom, within the Sterling Area. After World War II, the Sterling Area exchange controls were gradually phased out, but in South Africa in 1961 the controls were extended and given a specific South African function.
This followed upon disrupting internal political clashes (the Sharpeville incident), and South Africa’s withdrawal from the British Commonwealth. Exchange control in South Africa was now intended to provide some protection to the domestic economy from the adverse effects of large-scale outflows of capital. For the first time, exchange control also restricted the repatriation of non-resident investment funds from the country.