Bangladesh speaks out against online Forex Trading

Bangladesh one of the 'next eleven' markets (Goldman Sachs view on next economic growth area) has seen a rise in

Bangladesh one of the ‘next eleven’ markets (Goldman Sachs view on next economic growth area) has seen a rise in online speculative FX trading in the last two years, driving concerns that retail investors are not prepared for the risk involved.

The Central bank of Bangladesh formally warned investors to stay clear of Forex Trading.

Join the iFX EXPO Asia and discover your gateway to the Asian Markets

The banks press release stated, “Foreign currency can be purchased or sold only through dealers or money changers authorised by Bangladesh Bank. So the forex trading by another entity or person is illegal and punishable crime,”

Legislation states that only authorised people/ brokers can transaction FX under the Foreign Exchange Regulation Act 1947. The bank regulates FX and only licensed dealers and money exchangers to run such business.

The stock market had a lengthy bull run in the last five years as it doubled during a market boom in 2009/2010. The index was trading around 2400 in 2008 and rocketed to 5300 in May 2010.The market has come with a touch of volatility; 2010 was considered a boom year for investors, although a record fall in December created massive panic among those who had put their money in stocks. There was hardly any investor who made losses in 2010. The stock market witnessed a manifold boom – the price index, turnover, market capitalisation and its ratio to GDP (gross domestic product), and the number of new arrivals both in terms of issues and investors. The Dhaka market ranked third globally in terms of performance, according to an analysis of LankaBangla Securities.

Suggested articles

NEXT BLOCK SOFIA 2.0 + Fabulous Blockchain After-PartyGo to article >>

2011 saw an even bigger hit for the bourse, the market fell an astonishing 600 points and investors caused havoc on the streets of Dhaka forcing temporary closure of the exchange.

At its peak the stock market has daily trade volume of $428 million. Margin FX has been gaining interest from investors who have been burnt by the local stock market, online training on local stocks has triggered interest in the use of online platforms and MetaTrader 4 is popular amongst the countries FX traders.

Sending money out of the country has always been an issue and traders opt for payment methods such us World Pay, the new restrictions will make it more difficult for traders.

Bangladesh’s neighbour India has also been official outlawing Forex, 2011 saw the RBI make 3 specific announcements on the asset class.

Click here to access your latest copy of the Forex Magnates Retail Forex Industry Report.

Got a news tip? Let Us Know