Tunisia faced great economic challenges in the post-Arab Spring era. Now, the country is ready to open up the foreign exchange market to retailers
The Tunisian Revolution triggered the Arab Spring that spread into other North African and Middle Eastern countries in 2010-11. Seven years on from the uprisings, Tunisia has made great progress in its political transition to democracy, but its economy still faces challenges in the economic field.
The current Tunisian Government is working to boost the country’s economic growth and develop its financial market. One of the government’s goals is to open the foreign exchange market to the retail segment in the near future.
Although forex trading is currently limited to the interbank market, Tunisia is preparing to turn its dinar into a convertible currency for private investors, a move that many countries around the world have undertaken in the past decade.
European CEO spoke to Mokhtar Darmoul, General Manager and Senior FX Trader at BFX Baron Forex Education & Consulting, to find out more about how the Tunisian market is building a platform for Tunisia’s economic takeoff. The Tunis-based company, founded in 2011, is helping foster the professional knowledge for trading in Tunisia and the MENA region.
What are the main features of the forex market in Tunisia?
At present, the foreign exchange market in Tunisia is limited to the interbank market. This means that only banks are allowed to make transactions in the forex market with clearing margins. Retailers are not allowed to trade in the foreign exchange market, as Tunisia’s central bank prevents them from doing so.
When is the Tunisian financial system likely to open?
The current state of the forex market in Tunisia is expected to remain unchanged for the next five years, if not more. In 2016, the IMF approved a $2.9bn (€2.46bn) loan for the country. However, the Tunisian dinar still has some challenges to overcome in order to become a convertible currency for all investors.
The role of BFX is to prepare the human capital so that, when the time comes, investors can take advantage of the opportunities the Tunisian market offers
This could include overhauling the Tunisian banking system as a whole, as the country needs a solid interbank market with more liquidity and better assessment techniques, including stress tests. The retail forex market will open once the local financial market has built solid ground for such a step.
What is BFX Baron’s role in this process?
The company was created to address the increasing demand for education in currency and futures trading in Tunisia. The role of BFX is to prepare the human capital so that, when the time comes, investors can take advantage of the opportunities that the market offers. We are preparing the first generation of forex traders in Tunisia by providing traders with leading forex training.
Furthermore, we offer the best forex advisory service for Tunisian trading rooms. The service aims to help traders obtain good results from their transactions in the foreign exchange market.
What is the potential of the forex market in the country?
When the forex market opens in Tunisia, new investment opportunities for retailers and institutions will arise, and new positions for graduates will be created. Our most important goal is to make Tunisia the financial capital of Africa, and the continent’s most relevant port.
BFX is conscious that the opening of the foreign exchange market is a crucial step towards that goal, and so we are driving the process.
How does the company plan to take advantage of the opportunity?
For BFX, the opening of the forex market significantly increased the range of services we offer. Our plan is to obtain a licence to operate as an FX broker or FX money manager in order to support Tunisian residents’ investments. Having earned the trust of the main players in the local market and a reputation as the best FX trading centre and forex advisory provider in the country, we are confident we will become a market leader.
Looking ahead, openness will enable us to globalise our training and forex advisory services, allowing us to reach more clients.
At present, the company is establishing an offshore bank in the country. Our plan is to integrate our forex advisory services with the new bank so as to provide better services for institutional investors.
What tools do you offer and how do they help clients at present?
The BFX offering includes a market position tool (BFX MP) that allows us to advise clients on all the major currencies. This tool has helped us to reach a record performance in the last few years. We prepare the orders before the market starts and then introduce them through our tool. The client receives the orders and installs them into their trading platform.
BFX is helping foster the professional knowledge for trading in Tunisia and the MENA region
Our institutional clients subscribe to the EUR/USD silver package for their settlement, netting, clearing and trading transactions. Our FX analyst team also assists them via Skype so they can best use our signals orders, or to alert them of any changes in the orders within the market position tool. With these solutions, we help our forex advisory clients improve their transactions.
How do you differentiate from competitors?
The work of market rooms is focused on settlement, netting and trading. This is why traders at Tunisian banks have little experience in margin and speculation trading. For this reason, we have trained most of our Tunisian bank traders, market rooms and risk department staff in such skills. With such a knowledgeable workforce, we have won the confidence of our trainees and institutions alike.
In contrast, other Tunisian banks’ academies lack professional traders with experience as money managers or forex margin traders. Therefore, the main difference between our academy and our competitors’ is the experience of our coaches, who work as professional FX traders and money managers. Our methods, courses and strategies are applied directly to our FX advisory service, making our coaches the best FX traders.
What is your forecast for the next five years in the local market? What do you foresee for the company?
The years to come are promising. Expectations about the economy are upbeat, with growth projected to pick up. We plan to integrate services in our offshore bank. Our FX advisory services, with the addition of a new team of analysts, will then work in the bank’s market room.
Furthermore, we will expand our forex trading services for graduates. This is a key part of the strategy, as a rejuvenated financial industry in Tunisia will demand well-trained forex traders. These traders will be vital to the sector’s progress.