Kenyan Regulators To Shut Down Black Market Forex Traders
Participation in online ForEx deals is rapidly exposing the economy to money laundering and currency volatility- Central Bank of Kenya (CBK) has warned. Kenyans are therefore being warned against being duped by unlicensed online forex dealers nortorious for luring advertisements on social media and mobile applications. Just like in gambling, the recent past has seen scores of Kenyans invest money in shady forex deals with promises of high returns, only to lose money to these dealers.
During an online forex transaction, the trader may use Kenyan shillings to buy US dollars. This will depend on the least amount of money one can deposit with some accepting as low as Ksh1000. At this point, the two currencies are called currency pairs. Depending on the market situation, an individual can then go ahead and sell the currency at a profit. For one to make substantial profits, they have to correctly predict patterns of currency behaviour.
Forex brokers in Kenya acting as the nexus between markets and participants in the country have been on the rise with some making a fortune off the trades, and in the same breathe, some have lost millions in fraud. Usually, the business is termed ‘good’ when a certain currency is on-demand and depending on the platform one joins, the golden rule is; the more the players, the better the returns.
In a statement released October last year by Capital Markets Authority, Kenyans should only deal in legitimate Forex trades ran by licensed forex dealers. In Kenya today, EGM securities and Standard Investment Bank are the only licensed forex dealers.
Youth Employment
Young Kenyan citizens in universities and even new graduates are the majority in the forex trade business. Some of these younglings are even using the money earned from the online trade for school fees and sustainability for lack of employment opportunities in the country.
As risky as the business might be, Kenyans have gone ahead to set up training platforms online and in physical venues. Just like any other business, the risks are the same and gains and losses are paramount to an individual’s smartness or even luck. One Joseph Nderitu joined forex trading after losing a well paying job after which he met a friend who introduced him to the trade. Today, Nderitu is almost sure he does not need employment and he sees a better future in Forex trades as his business keeps expanding.
With Ksh30,000 as starting money, today he is worth hundreds of thousands and is also earns his dues from training persons from fresh graduates to old men and women. With the recent threat from regulators on participation in such trades, Nderitu says it will leave many jobless Kenyans stranded since working under Central Bank’s regulation might impact businesses negatively.
