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Letters to the Editor

Making forex trading open for all

January 02, 2024 00:00:00

The foreign exchange (forex) market is a global marketplace for exchanging national currencies. Because of the worldwide reach of trade, commerce and finance, forex markets tend to be the world's largest and most liquid asset markets. Currencies trade against each other as exchange rate pairs. Forex prices move constantly and create more opportunities to make speculative profits. Forex trading works like any other transaction where investors buy one asset using a currency. The only difference is that in Forex, investors purchase currency using another currency. In the case of forex, the market price tells an investor how much of one currency is required to purchase another. For example, the current market price of the BDT/USD shows how much taka it would take to buy one US dollar.

Forex market is a very profitable marketplace for investors. As this market changes constantly, investors need good knowledge to make a profit from it. However, forex trading is illegal for unlicensed individuals in Bangladesh. Foreign currency can be purchased and sold through the dealers or the money changers authorised by Bangladesh Bank. Only licensed dealers and money exchangers can run this business. This law should be updated and the government should legalise forex trading for everyone. If forex is legalised companies will be able to arrange their foreign currency for trading. We need foreign currency to import necessary products and raw materials for our industry. If forex is legalised, companies will be able to arrange their foreign currency easily to conduct their businesses. The government can open a platform for forex trading and monitor it in case of any kind of scam or illegal activities. And the government can earn high revenues from this trading as tax or service charge. Forex will help balance the foreign currency reserve and help companies hedge exchange rate risk. From the forex market, an investor can make a profit by speculation. If an investor thinks any currency rate will increase in the future, he can buy it now and sell it later. This is how this trade can go on.

Shefat Bin Hossain,

Student of North South University, Dhaka,

[email protected]

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