A survey of arbitrage opportunities in the foreign exchange market: the case of Forex bureaus
Abstract
This central focus of this study was to survey and establish whether there exists arbitrage
opportunities in foreign exchange market. In undertaking the study. thirty forex bureaus
operating in Nairobi were sampled out of the ninety-four lorex bureaus operating in
Kenya. Data collection was done by the use of secondary data that was obtained from the
respective forex bureaus.
Research findings revealed that indeed there exists arbitrage opportunities. It was
established that dealers in various currencies can capitalize on the inefficiencies and gain
by buying from one forex bureau and sell in another before the equilibrium is restored.
Arising from research, measures aimed at improving the current account position,
including policies that affect exports and imports of' goods and services are instrumental
in stabilizing the exchange rates. This wil] go along way to ensuring that arbitrage
opportunities are minimized.
Sponsorhip
The University of NairobiPublisher
School of Business ( SOB )