CURRENCY TRADING IN SOUTH AFRICA


Forex Trading in South Africa

South Africa is the beacon of hope for the African continent, and the world at large. It is a multicultural melting pot bustling with diversity and with economic activity. As Africa’s powerhouse, FX trading is high on the agenda for South African traders. The global FX market is currently worth an estimated $5 trillion per day, and South Africa certainly chips in with their share of the currency trading market. A large global network of buyers and sellers engages in FX trades on a daily basis. FX traders have increasingly sought out South Africa as one of their preferred currency trading destinations, what with fundamental economic strength, and a huge domestic economy. South Africa is considered an emerging market economy, and part of the BRICS (Brazil Russia, India, China, and South Africa) countries. It is a developing nation, with incredible potential on an economic front. SA traders face a unique set of regulations when it comes to FX trading, different to those in effect in Europe, Australia, Asia and beyond.

The South African Revenue Services (SARS) and SA Regulations

 

Until recently, South Africans were limited to R4 million for the establishment of offshore accounts and R1 million when it comes to trading currency pairs. When regulations changed in 2010, both these allowances – stipends – were altered to allow South Africans to trade R5 million combined. This is the total investment amount that South African currency traders are allowed in FX markets. This indicates that Forex regulations are steadily changing in South Africa, and with the allowance being combined in this manner we can expect more in the near future. South African Forex traders who operate businesses are also viewed in a more favourable light when it comes to the South African Reserve Bank. In South Africa, Forex trading is regulated by the Financial Services Board, otherwise known as the FSB. The Financial Advisory and Intermediary Services oversee all activities of Forex brokers in the country.

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The total number of currency pairs (major, minor, and exotic pairs) available to traders in South Africa typically ranges from 30 – 50. Of course, this depends on the FX broker in question. South African Forex brokers vary in terms of quality, spreads, and pairs available for trade. Be advised that there is no one-size-fits-all policy when it comes to FX brokerages in South Africa. You may be partial to trading the USD/ZAR, GBP/ZAR, JPY/ZAR or the EUR/ZAR currency pair, depending on your particular bent. Several ranking Forex brokers now operate in South Africa, including the following: Plus500, Markets.com and EasyMarkets. These brokerages offer SA Forex traders generous bonuses, often with no deposit required. It’s important to read top Forex broker reviews in South Africa to find out whether they are regulated by the FSB, and what types of forex and related trading services they offer. Avoid brokerages with high spreads, as these indicate large profit potential for the brokers, and not for the traders. Low spread brokerages are preferred


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