Listen to the Article: Why You Should Be More Aware of the Saudi FX Market?

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Saudi Arabia is a fascinating country, where you can't enjoy bacon or booze, but forex trading is not off-limits. Yes, you heard that right. When we talk about the financial markets in the Middle East, we always think of Dubai, a city and emirate in the UAE, and often overlook Saudi Arabia, which occupies 80% of the Arabian Peninsula.

Just like the women there who have to wear Abaya in public (although this is no longer mandatory since 2019), the kingdom is also hiding itself from the rest of the world.

So today, we will lift the veil of the Saudi Arabian forex market and see what makes it unique.

Saudi Forex Market: Everything Needed Is Right There

First of all, as we mentioned earlier: forex trading is legal in this country. According to the laws, any individual living in the Kingdom of Saudi Arabia (KSA) can access the forex market and trade currencies online. Financial service providers, including forex brokers, are regulated by the Saudi Central Bank - the Saudi Arabian Monetary Authority (SAMA) - and the Capital Market Authority (CMA). In 2019, CMA issued the first forex license to Riyadh Capital.

Secondly, we need to recognize that KSA is a huge market, with enormous wealth and population, and a large number of investors who are eager to invest their money in cryptocurrencies, stocks, and currencies (after all, they are no strangers to oil futures trading). The 2022 Saudi government census showed that the country has 32.175 million people. According to IMF estimates, Saudi Arabia's nominal GDP will exceed $1 trillion in 2023, with a per capita GDP of nearly thirty grand, making it a typical high-income country.

In addition, a survey by McKinsey in 2016 showed that nearly 70% of all working population in Saudi Arabia work in the public sector. Not only that, most Saudi citizens have a pretty much relaxed job, with an average monthly income of $2,400 for government employees and that was statistics back in 2013.

Therefore, being "rich" and "idle", it goes without saying how many potential investors there are in the Saudi forex market.

What Makes the Saudi Forex Market So Unique?

As an Islamic country that runs on Sharia Laws, the financial market here cannot have anything that contradicts Islam. Here we have to mention an intriguing idea - "Islamic account (or halal account)".

In fact, the Islamic account is part of a broader concept of "the Islamic financial system". In 1966, more than 300 scholars from the legal and economic fields attended the first global Islamic economic conference held in Mecca, and established the concept of the Islamic financial system. The main difference is: interest payments are prohibited, all businesses must share profits and losses, and share risks. The origin of this is mainly based on the core value of opposing "money makes money" in the Quran.

Specifically for forex trading, Islamic accounts are those that do not incur fees for overnight positions. These interest fees are either completely canceled or reflected as commissions for each transaction. Different brokers have different policies. However, most of the platforms that operate in Saudi Arabia offer Islamic account features, including well-known ones such as Plus500 and XTB.

Next Time You Talk About the Middle East, Give Saudi Forex Market Its Due Attention 
In summary, we can see that Saudi Arabia as a major country in the Middle East has not received much attention in terms of popularity. From its market perspective, Saudi citizens also have the lowest savings willingness (although interest is prohibited, Islamic law encourages investment behavior to some extent). In May this year, Arabian Business conducted a survey showing that the average savings rate of Saudi households was less than 2%, leading to a savings crisis in the country.

Therefore, with the further promotion of measures including the opening up of the country's financial market by Crown Prince/Prime Minister Salman after he took power, perhaps next time you talk about the Middle East, you should give this regional power its due attention.