Posted By Gbaf News
Posted on November 4, 2011
In response to the re-ignited eurozone debt crisis, business entrepreneur Rajesh Agrawal of London-based foreign exchange brokers RationalFX was quoted today as saying “the recent fall in the value of the Euro is encouraging our business customers to buy large volumes of Euros at these more affordable levels. We saw record volumes across our English and French desks yesterday – as well as a record number of customers open new accounts.“
“Our customers are asking about the future of the Euro. Imagine if Greece declared that they were about to leave the Euro and started trading in the New Drachma. This would cause all sorts of short-term problems for the Euro as the mechanisms for such an extractions were worked out – not to mention speculation about further exits from the Euro. How would one value Euro-nominated sovereign debt for countries leaving the Euro? There could be mass default on these with the ECB picking up the tab too. Other concerns include how the Banks would stop individuals in exiting Countries withdrawing or borrowing every Euro they can get their hands on prior to the day of withdrawal. Such ideas were unthinkable but, after the Greek Prime Minsters statement yesterday, I am beginning to imagine that it’s all possible.”
“Longer term, the remaining countries in the Euro would all probably quickly make pronouncements about economic policy harmonisation and this could in turn make the Euro a shoe-in as the replacement Reserve currency of the World replacing the US Dollar. Perhaps the UK would also be tempted to join such a currency. If not I could easily see the GBP/EUR going well under 1 which is great for UK exports.”
“During an economic crisis such as this, it’s imperative that companies and individuals that have exposure to the Euro in any way need to ensure they reduce their risk by having an FX specialist such as RationalFX on board, especially when they could forward buy and fix rates for up to two years for around 5% deposit. You might think that, as the CEO of an FX specialist like RationalFX, I would be rubbing my hands in glee at the prospect of a lot of new currencies – but the harm to international trade would be a disaster for every sector of the Global economy, including ours.”
RationalFX is one of the world’s fastest growing and most competitively priced independent foreign exchange companies. Established in 2005, RationalFX has completed worldwide FX transactions worth over £1.25 billion to date and annually helps tens of thousands of private clients, businesses and large corporations with more competitive foreign currency exchange rates, giving them huge cost savings compared to the Banks and other FX Brokers. The company is authorised by the Financial Services Authority (FSA) in the UK with headquarters in London and offices in France and Italy.