e-Forex-Nov-23

REGIONAL E-FX PERSPECTIVE
The MENA region has never grabbed
FX headlines quite as violently as it did
this past month. News of the Israel-
Hamas conflict increased volatility in
the stock and commodity markets, with
the side effects impacting FX flows.
However, the current crisis has not
changed the prevailing e-FX story in
MENA. The electronification of FX,
fintech sophistication, and the Gulf
region’s decoupling from oil wealth
are all steadily rising. Add to this the
resilience of Israel’s nascent fintech
sector and growing diversity in financial
products on offer and the MENA’s
overall economic and technology
outlook seems well placed despite
current events.
Hussain Almohri, Head of Trading,
MENAT, at HSBC, points to strong GDP
growth as a factor for increasing FX
demand. “During the past couple of
years, what with strong GDP growth in
the region,” he says, “there has been
a material shift in FX requirements,
particularly after the pandemic.”
“Saudi Arabia alone is projected to
see its GDP reach US$1.7tn by 2030.
It stood at over US$1trn for 2022, up
from US$868bn the year before. In
addition, many asset managers and
hedge funds have moved their physical
locations to MENA, to capitalise on
the economic growth of the region,
the region’s vision to invest in its
infrastructure, as well as its ambitious
growth plans.”
DELIVERING TRANSPARENCY
Recent local economic reports show that
cross-border FX needs have remained
high, given the number of expat
workers in the region’s biggest markets.
While recent drives to hire citizens in
Gulf countries have slowed FX volumes a
bit, the region continues to account for
a significant amount of outflows.
For instance, the Gulf region accounts
for the highest amount of FX outflows
NOVEMBER 2023 e-FOREX 33