The Collusion Hit a Soft Landing: A Currency Manipulation of the South African Rand Through Spot Market Trading
Résumé
The foreign exchange (FX) spot market plays a pivotal role in global currency trading, offering a platform for speculative transactions. Unlike most FX instruments, such as derivatives, which are subject to regulatory oversight, the spot market remains largely unregulated by central banks. This regulatory gap creates fertile ground for currency manipulation, particularly affecting developing economies. Although currency manipulation is not a new phenomenon, recent cases involving global banks and the hedge fund, Glen Point, underscore the urgent need for transnational regulatory intervention. Despite longstanding academic discourse on the subject, legal scholars have yet to reach a consensus on how to regulate the spot market, largely due to the complexity of cross-border transactions and the nature of spot contracts. This paper argues that the spot market's lack of regulation enables manipulation that disproportionately affects developing economies such as South Africa. This paper proposes a two-pronged regulatory framework to address the issue that employs both national and transnational mechanisms. It thereby adds to the existing body of knowledge on FX markets and spot market regulation, including transnational law, while fostering a discourse on the spot markets' transnational regulation.
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