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London Bourse 'Well Placed' to Cope With Brexit
Jul 4, 2016 9:50 AM
By Rapaport News
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RAPAPORT... The London Diamond Bourse (LDB) said it is in a strong
position to face the post-Brexit storm because of its access to a bonded
warehouse enabling duty-free trading but warned of currency headwinds.
A bonded warehouse is a facility overseen by customs authorities where imports that are subject to customs duty are stored duty-free before being re-exported.
The U.K. capital’s diamond industry is hedged against the
outcome of discussions over the country’s future relationship with the European
Union, the gem exchange pointed out in a statement to Rapaport News. The
British electorate voted to leave the bloc in a referendum on June 23.
“LDB is really well placed to defend its members as the
future negotiations of the European Union and U.K. play out,” said Victoria
McKay, the exchange’s chief operating officer. LDB members’ access to the
bonded warehouse means if the EU imposes import restrictions on the U.K., they
will be able to use the facility further.
“If we remain part of the single market, we will still be
able to offer bonded warehouse facilities to those members wishing to purchase
outside the EU,” McKay added.
However, the dive in the pound’s value – falling about 12
percent against the dollar since the referendum results – makes life harder for
London traders because they buy in the greenback and sell in sterling.
“The major problem for our members is the uncertainty in the
currency,” McKay said.
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Tags:
Bonded Warehouses, bourses, Brexit, EU, European Union, london, London Diamond Bourse, Rapaport News, trade, u.k., Victoria McKay
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