CBL warns pub­lic on forex trad­ing

Sunday Express - - FRONT PAGE - Bereng Mpaki

THE Cen­tral Bank of Le­sotho (CBL) has warned the pub­lic against in­vest­ing in for­eign cur­rency busi­nesses (forex trad­ing), say­ing they risk los­ing their money to il­le­gal forex traders.

In a re­cent state­ment, the CBL said that forex traders were op­er­at­ing il­le­gally as none of them had been is­sued with li­cences by the apex bank.

The CBL also di­rected all forex traders to im­me­di­ately stop their op­er­a­tions.

“As the com­mis­sioner of fi­nan­cial in­sti­tu­tions, the Cen­tral Bank of Le­sotho ad­vises the pub­lic that there are per­sons and com­pa­nies who take de­posits from the pub­lic with the pur­pose of trad­ing in for­eign cur­ren­cies on be­half of the pub­lic and on the prom­ise that they will get lu­cra­tive re­turns on their de­posits within a cer­tain pe­riod.

“The pub­lic is warned that th­ese in­di­vid­u­als and com­pa­nies are op­er­at­ing with­out li­censes from the Cen­tral Bank of Le­sotho. The Cen­tral Bank there­fore ad­vises the pub­lic to de­sist from giv­ing such per­sons or com­pa­nies any monies un­der the im­pres­sion of mak­ing an in­vest­ment.

“The pub­lic is in­formed that par­tic­i­pa­tion in any ac­tiv­i­ties re­lated to the ac­qui­si­tion, trad­ing or use of fi­nan­cial se­cu­ri­ties is at the user’s sole risk. In the event of any losses re­sult­ing from par­tic­i­pa­tion in th­ese forex trad­ing ac­tiv­i­ties, there shall not be any re­course to the Cen­tral Bank of Le­sotho.

“The Cen­tral Bank of Le­sotho di­rects any per­son or com­pany that is col­lect­ing money from the pub­lic for forex trad­ing ac­tiv­i­ties to cease do­ing so with im­me­di­ate ef­fect,” the CBL said in the state­ment.

Mean­while, the Con­sumers Pro­tec­tion As­so­ci­a­tion (CPA) has wel­comed the warn­ing by CBL, say­ing con­sumers should ex­er­cise cau­tion when de­cid­ing to in­vest their money in any in­vest­ment ve­hi­cles.

The CPA how­ever, said the state­ment had come too late when many peo­ple had al­ready lost money to the forex traders.

“While the (CBL) state­ment has good in­ten­tions, it has come too late when some con­sumers have al­ready lost money in th­ese in­vest­ments. The CBL is re­ac­tive in­stead of be­ing proac­tive be­fore th­ese schemes even en­ter the mar­ket,” said Nkareng Let­sie, the ex­ec­u­tive di­rec­tor of the CPA.

He said forex trad­ing was no dif­fer­ent from other forms of gam­bling, where one could ei­ther win or lose money.

Mr Let­sie fur­ther added it is bet­ter for peo­ple to trade in forex on their own in­stead of en­gag­ing third par­ties as this in­creased the like­li­hood of be­ing cheated of their money.

He said the poor state of the econ­omy re­sulted in high lev­els of un­em­ploy­ment and in their des­per­a­tion to make money, some of the jobless peo­ple turned to the il­le­gal forex traders where there were high chances of los­ing even the lit­tle money they had.

He said the CBL should ex­pe­dite the op­er­a­tional­i­sa­tion of the Maseru Se­cu­ri­ties Mar­ket which has been dor­mant since its es­tab­lish­ment in 2016.

He fur­ther added that only wealthy in­vestors could af­ford to in­vest in the avail­able le­gal in­vest­ment in­stru­ments such as govern­ment bonds and trea­sury bills.

THE Cen­tral Bank of Le­sotho

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