The growing appetite for investment in the Middle East resulted in rapid growth in the forex industry in the MENA region, pushing individual investors into global markets.
According to the Bank for International Settlements (BIS), trading in foreign exchange markets stood at $ 6.6 trillion per day in April 2019, down from $ 5.1 trillion three years ago, 0.1 percent each.
This growth is mainly due to the increased awareness of the opportunities for investors in the foreign exchange market as well as the strategic location of the region between Asia and Europe. The local time zones enable the region to record the market opening times in the Far East as well as the US closing times on the same working day, thus enabling better access to the global market, especially to the G7 currencies.
Investors in the MENA region prefer value-adding investments, namely safe-haven currencies such as the US dollar, the Japanese yen and gold.
– Raed Alkhedr, Head of Market Research at Equiti & amp; analysis
Improved regulatory controls by various agencies is another factor attracting investors to the forex industry. Two such authorities in the Gulf region that provide forex investors with a well-supervised regulatory environment are the Securities and Commodities Authority (SCA) and the Jordan Securities Commission (JSC).
Industry growth in the MENA region also gained momentum through the introduction of Sharia-compliant currency trading and the increased availability of Islamic trading products. For example, swap-free accounts are considered Sharia-compliant and allow access to forex trading without compromising Islamic principles.
Investors in the MENA region prefer value-adding investments, namely safe-haven currencies such as the US dollar, the Japanese yen and gold. The increased demand for investment opportunities in the MENA region is urging individual investors to look for greater opportunities and access to international markets.
Recently, a multitude of global variables have made the currency markets volatile, and this increased the opportunities for traders in the Middle East, namely volatile monetary policies in response to the economic impact of the coronavirus pandemic, accompanied by the stimulus plans and the US presidential election. Although there are many disclaimers from authorized companies regarding the risks of forex trading, many individuals in the Middle East looked to foreign exchange to find profitable opportunities, particularly in precious metals like gold, where a huge rally in 2020 hit an all-time high of $ 2,074 per ounce.
In addition, the depreciation of the US dollar value due to changes in monetary and fiscal policy serves to accelerate the gold price through inflation. Gold saw 37 percent growth in its rally from its lowest point in March 2020 to its all-time high in August 2020 and ended the year up 24.8 percent annually.
This content is from Reach by Gulf News, the branded content team at GN Media.