Forex Magnates Exclusive: A temporary ban has been agreed upon which bans forex transactions as per a memorandum signed and executed in the early hours of the morning by a number of bankers, as announced just moments ago as breaking news.
The freezing of FX transactions has wide scope repercussions across the globe and is said to be tied to the ongoing probe of FX rate manipulation, Forex Magnates investigates. The ban was said to take place on the central bank level thus affecting all market participants, as per the release.
Only a number of permissible trades will be allowed during the ban, including exchanging hard currency at airport kiosks and related money Exchange businesses, commercial transactions for business and for the purpose of travel needs, this ban period stands to affect trillions of US dollars worth of trades (including from all tradable currencies). Further announcements may follow regarding monetary policy and related restrictions.
Forex Market Halted, Rates Frozen, Ban Period Undetermined as of yet
Due to the substantial amount of data generated by the collective FX market, a brief halting of trading was expected to allow the investigation to catch up with processing several trillion ticks worth of price updates, compiled over the last decade, according to sources.
It’s not clear how many central banks are on board with the effort, but with rates frozen over the weekend for a number of currencies (+70 pairs) it appears the number could be massive with our reporters unable to find pairs that had traded during the period in question.
ICOSCO, the International Counselors Of Safety Coordination Organization, with online presence, had made the memorandum possible according to their announcement, for the sake of the market's integrity and participant's safety, as the method for in which rates are determined has come under scrutiny.
ICOSCO Memorandum said to Provide Legal Basis, Lawyer Claims
While trading may resume on Sunday for a number of participants, its uncertain how longer the trading ban may persist, and appears to have been a strategically timed announcement, with the first quarter (Q1) just concluding yesterday, and the start of Q2 beginning today.
Forex Magnates will watch the situation closely and update this post with future developments, as we consider this matter of the utmost importance. We expect global news agencies may follow reporting on this developments, as the market becomes aware of the change, and considering the size and scope of the potential effects of this news.
Around time of publication, Forex Magnates reporters spoke with Lirpa Sloof, Managing Director at Syadot Ekoj, in Scandnavia, and he opined how efforts were underway to turn the market back on, and how there still remains a large degree of ambiguity surrounding how many rates could have even had frozen during the ban period, and added, "We have spoken to our legal advisors at Romuh & Shgual, and they have informed us that the ban was timed to be announced on April 1st, 2014, with unknown date of expiration."
Forex Magnates, by the way, wishes everyone a Happy April Fool's Day!
