Richard Willsher
Richard Willsher

Regional e-FX perspective on the Middle East

Electronic foreign exchange trading made a slow start in the Middle East. Take up is now well advanced in some sectors and some countries, though a lack of infrastructure, varying degrees of regulation and local civil and political disturbances paint a mixed picture across the region as a whole.

If we define “Middle East” to include the entire Arabian peninsula encompassing the Gulf, Iran, Iraq, Syria, Jordan, Lebanon Turkey, Israel and Egypt, it is region with massive foreign exchange needs. On one side the largely US dollar denominated receipts from the sale of hydrocarbons, on the other the import bills for manufactured goods and infrastructure developments produce huge foreign currency liquidity while local currency requirements also need to be met. Add to these trade requirements the appetite for foreign exchange trading and speculation and the Middle East region ought to register more prominently than it does. The latest Bank for International Settlements Triennial Central Bank Survey groups Middle East and Africa as one, and last among all regions for the size of its average daily turnover in spot transactions as at April 2010 with just $13 billion out of a total of $1.8 trillion. Across all product categories the region accounts for $41 billion out of $5 trillion globally. Yet...continued

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