Foreign exchange traders are in shock following the Nepaleses government’s warning of a “national emergency” on Tuesday, with many worried about the fallout from the country’s currency collapse.
Key points:Foreign Exchange Trading Company Ltd, which helps companies set up in Australia and New Zealand, said it was concerned about possible disruptions to trade in its trading centresThe Nepalesi Government said it is prepared to “respond to any disruption in trading” in its financial centresIt comes just days after the currency board issued an emergency order to stop withdrawals from all trading centres on Tuesday.
Foreign exchange trading company Nepalesis Foreign Exchange Trading Ltd (FET) said it had been “somewhat surprised” by the government’s announcement, and urged businesses to keep “accounts and balances” as normal.
“Our trading is highly seasonal and we expect to have an adequate supply of funds for all our operations for a few days,” it said in a statement.
“However, we are still working through the ramifications of this announcement, as well as our ongoing operations and the impact on our clients.”
We have been expecting a prolonged period of heightened uncertainty, and we would urge all traders to maintain as normal their trading and trading accounts.”FET chief executive Gurbaksh Chatterjee said the country had a “strong trading base and international network” and that the move would have an “impairing” impact on the company.”
In terms of the immediate implications, we would like to reiterate that all foreign exchange trading is suspended for the foreseeable future.
“But as soon as we are able to resume normal operations, we will provide all our clients with the opportunity to continue trading in the domestic market,” he said.
“If you are trading on behalf of clients, please keep accounts and balances in good condition and comply with all relevant policies and regulations.”
This is a precautionary measure and we will monitor the situation closely.
“As we work through the consequences, we can assure you that we will always act within the law.”
Mr Chatteree said it would be difficult to “immediately restore” the trading system, but that the company was ready to “provide any support necessary”.
“We would like everyone to keep their accounts open and trade in the local currency and we have been in communication with our customers to ensure they have the necessary support,” he added.
“At this time, we remain hopeful that the situation will calm down quickly and we can continue our business as usual.”‘
Nepalese traders are looking at moving overseas’Foreign Exchange traders said they were concerned about the implications of the government announcement.
“The Nepali government has announced a national emergency, and it is a bit scary, I guess.”
People are looking to move abroad, and that’s a risk we’re taking,” FET chief operating officer Gurbaksch Chatterjee told The West Australian.”
For a long time, people have been working hard to make sure we have sufficient funds for our business, and to ensure that we don’t lose our business.
“Right now, our trading is heavily seasonal and it will take a while to get back to normal.
But we will be ready and willing to provide any support needed.”
It is very difficult for us to say whether or not we will resume operations but we will certainly work to ensure the situation is not detrimental to our business.”FED suspends all trading and withdrawals in Nepales, with no refunds possibleFET said it has suspended all trading in Nepal, with customers unable to withdraw funds.”
Nepal is the largest foreign exchange market in the world, and all foreign currency transactions are subject to the Nepal Currency Board’s (NCB) orders,” it wrote on its website.”
Any withdrawal of funds from the market will not be possible.
“A temporary halt to trading will be in place from Monday 25 June until the new year.”
Further, FET will provide a limited number of refunds, of up to US$30 each, to any customers who withdraw funds in Nepal.
No immediate effect’The NIB said it issued a “notice of emergency” to halt withdrawals of foreign currency in Nepali currency from 5pm on Tuesday to 5pm Wednesday, and warned customers to be prepared to exchange their Nepali dollars for US dollars at official exchange offices in the country.”
The NCB will provide refunds for customers who have already withdrawn from Nepal, and those who withdraw from Nepal in the foreign currency of their country of nationality.”‘
No immediate effect’The NIB said it issued a “notice of emergency” to halt withdrawals of foreign currency in Nepali currency from 5pm on Tuesday to 5pm Wednesday, and warned customers to be prepared to exchange their Nepali dollars for US dollars at official exchange offices in the country.
The NMB did not say whether it would immediately suspend trading, but Mr Chatterjaye said FET would continue to offer refunds to customers who had withdrawn from the Nepali dollar.
“Foreign exchange traders should continue to transact with the NIB as normal,” he told The Western Australian.