Calls to regulate forex trading have so far fallen on deaf ears among policymakers, despite the industry’s global significance and its continued expansion—even in times of crisis. In the last quarter of 2008, the average daily turnover in the foreign exchange market reached approximately $3.2 trillion. To put this in perspective, the US government bond market recorded a daily volume of $500 billion, while the New York Stock Exchange saw $156 billion in transactions, according to recent financial reports. These same reports indicate that forex traders, particularly in the Middle East, have significantly increased their activity—especially in euro/dollar trading—since the onset of the global financial crisis, attempting to capitalise on market volatility and rising demand for liquidity in US and European markets.
Forex is a market of exceptional scale and unique characteristics, with trading volumes far exceeding those of any other financial market. This should make it a key area for regulatory attention, particularly as it could serve as an alternative for investors seeking profits while other markets continue to struggle. As al-Borsa continues to follow this issue, it consulted an industry expert to gain insight into the situation. Tarek Ziad, chairman of FixExpo—the organiser of the CMMX exhibition, one of the region’s most prominent forex trading events—confirmed that trading volumes have surged in the aftermath of the financial crisis, despite the absence of regulatory frameworks to govern the market and protect investors. He pointed out that the only real safeguard for traders is the self-regulation exercised by forex service providers, who are responsible for offering risk advisory services to clients. However, he noted that many traders approach the market recklessly, ‘as if they were playing online video games’.
Ziad acknowledged that many traders suffer heavy losses, but attributed this to the lack of neutrality among some forex brokers, whose primary goal is to maximise trading volume—regardless of whether their clients make or lose money. He also highlighted a major event that shook the forex market during the crisis: the sharp drop in oil prices, which he described as an ‘upheaval in the futures market’. This sudden shift caused major losses for some speculators while unexpectedly enriching others. Given the scale and influence of the forex market, Ziad criticised the Central Bank of Egypt for its failure to intervene and regulate the industry, arguing that this lack of oversight leaves investors vulnerable to unlicensed firms. He emphasised that Egypt has historically been one of the region’s earliest participants in the foreign exchange market, long before the advent of online trading.
When asked whether Egypt could face a crisis similar to the recent forex collapse in Jordan, Ziad was unequivocal: such a scenario is entirely possible if regulatory gaps persist and unlicensed operators continue to flood the market. He stressed the urgent need for serious brokerage firms to educate investors about the risks of speculation, warning that only through compliance with proper safeguards can Egypt avoid repeating Jordan’s misfortune and prevent traders from losing their capital.
This article is originally published by AlBorsa in Arabic and later AI-translated by South Push.