East Africa: EAC in Crackdown On Illegal Forex Trading
East African governments have stepped up the war against and speculative foreign currency trading.
The latest effort has seen the region's central banks and capital markets regulators tighten forex trading regulations to weed out fraudsters from the lucrative business.
It is argued that illegal forex trading stands to trigger inflation in the region and weaken local currencies, which would make imports expensive and further worsen budget deficits for regional economies.
For instance, in Tanzania, the local currency depreciated by 0.3 per cent between September and October this year and 2.2 per cent on average in the past 10 months, according to data compiled by global advisory firm StratLink.
The Tanzanian shilling closed the month of November at 2,291.7 units against the US dollar, down from 2,281.5 units against the greenback at the beginning of the same month.
Bank of Tanzania carried out a six-month investigation into the illegal business, which revealed rampant fraud the forex market business, with several traders involved in money laundering. As a result, the banking regulator launched a crackdown on this illegal business by suspending the licensing of new forex bureaus, arresting some key suspects and barring suspect commercial banks from the interbank forex markets. Read more from All Africa.
Source: All Africa