by Samuel Robinson on June 22, 2020

South Africans are relying on FX more and more amid pandemic

The coronavirus pandemic has hit countries from Asia to the Americas altogether. The novel coronavirus that originated in China’s Hubei province has now covered practically the entire world. The virus has been contracted by more than 8 million people, whilst the human cost of the biggest turmoil faced by the world in modern history is nearing the grim number of half a million.

Besides the health and human cost of the ongoing pandemic, the COVID-19 infection is also affecting the world in a whole different way. None of the pandemics faced by us throughout recent decades have caused anything alike. The economic pressure on the entire world is simply tremendous, as a result of the lockdown that has lasted for more than 2 months in many places. Without an effective treatment or a vaccine in place, the only way we have to fight the spread of the virus is . Many experts say that using the term “physical distancing” would be more accurate as the concept implies keeping a safe distance of at least 2 meters between all individuals, at all times. There is no exception and this should continue the way it is if we want to win this unprecedented fight.

Countries like the United Kingdom and Germany have witnessed total and extremely strict lockdowns lasting for months. People were not allowed to meet up with anyone, except for individuals in their own households. The rules are getting lifted in many places, but the general reality remains unchanged. All businesses, companies, and most importantly, individuals should adjust to the current situation and the new way of living that the coronavirus pandemic has brought to all of us.

COVID-19 has a major impact on businesses and the economy

With experts saying that the coronavirus vaccine is 12-18 months away from now, the economies around the world are expected to keep shrinking for the foreseeable future. Even if the vaccine is out in 12 months, the distribution of it will take quite some time. Therefore, optimism should be changed by the actual work that everyone does at the individual level, by being highly aware and socially responsible in efforts to tackle the pandemic at a gradual rate.

The businesses are highly affected by the pandemic and that can be best-seen across Africa, where the tremendous number of SMEs were forced into closing down. Many factors along those have an impact on the global economy, which is bracing for the worst recession since the great depression. The number of lost jobs closed businesses and other indicators already exceed the aftermath of the 2007-2008 global financial crisis. Due to the number of lost jobs across the continent, thousands of people started to learn as it was the only “self-employment” they could afford at the moment and the only thing they could begin immediately.

This will be highly reflected in the lives of people in poorer, underdeveloped, and developing nations, where the governments do not possess enough resources to fund their citizens throughout the crisis. That is the prime reason why African governments do everything to prevent community transmission within their nations.

FX growing globally but South Africa shows particularly high numbers

Amid the high number of bankrupted businesses globally, the prospect of Forex trading became even more popular practically everywhere. Representatives of  firm say that their global activity has been on a steep increase recently. However, the leading company’s representatives emphasize the unusual activity by the users from the South African Republic within the forex market, showing that more and more people are ready to invest in the sector. But what has truly sparked the trust and high anticipation of success in terms of forex trading across South Africa?

This southernmost country of the continent remains to be one of the economic leaders of the region. However, the coronavirus pandemic has hit it more than it has impacted many of the others. With the number of coronavirus cases nearing 100 thousand, South Africa is officially the worst-hit nation on the continent. However, we should not miss out on its specificity in comparison to other African nations.

The republic is the most integrated country in the global economy among others in the region. This has its historical reasons, particularly the ties with the United Kingdom that keep being a defining factor in the development of South Africa. Therefore, as the outbreak erupted in Britain, the consequences were already highly visible in South Africa. Tens of thousands of people travel between the two nations, with London airports offering multiple flights per day to Cape Town and Johannesburg. With all of this , the nation came to a virtual standstill.

In the meantime, many people lost their jobs and businesses. Those with savings decided to invest in something that could help them overcome the struggles throughout the crisis and many of them found Forex the easiest way to see tangible results within a short period of time. Moreover, major shifts in currency prices throughout the pandemic have also contributed to the sudden popularity of Forex trading in South Africa and beyond.

Importantly, one should also consider that the Forex market in South Africa is less developed and deregulated than those in the United Kingdom, Germany, or Australia. Therefore, the number of offers and illegitimate brokers are also extremely high. Nevertheless, regardless of what the situation is on the market, South Africans seem to be relying on Forex more than anything else right now.

It is difficult to say whether the sudden uprise of the Forex sector in South Africa will continue indefinitely or not. The fact is that it has been caused by the global pandemic, which, sooner or later will fade away. However, before the time comes, the industry might find a way to establish itself better in the country, attracting more loyal people. Changing the legislation because of the recent trend and more flexibility on the market is unlikely, yet, the positive shifts are evident and they are helping many people out of the potential post-crisis poverty.

By Samuel Robinson

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