Asia continues to rise as FX trading hub
(8 September 2016 – Asia) For the first time in more than a decade, the UK’s share of the global currencies trading market dropped to 37.1 percent, down from 41 percent in 2013.
New data from the Bank for International Settlements (BIS) has also confirmed that Asia is rising to the top of the global FX trading market.
BIS found that, together, Singapore, Tokyo and Hong Kong now accounting for 21 percent of the sector, up from just 15 percent in 2013.
“Payments, FX and trade finance are the markers to watch for growth in RMB internationalisation,” said SWIFT Director of Securities Markets in the Asia-Pacific Alex Medana in 2014.
“The RMB is primarily used as a trade settlement currency, but it is worth nothing that the RMB is steadily making progress as an investment currency.”
The BIS survey shows that the renminbi has doubled its take of the global FX market, surpassing the Mexican peso as the most traded currency among those of developing nations.
Singapore is now the world’s third-largest FX market, surpassing China, data from the Triennial Central Bank Survey found.
The data revealed Singapore handled US$517 billion in forex and over-the-counter derivatives in April. A far cry from the UK’s US$2.4 trillion, it however represented a 35 percent increase. Meanwhile, volumes in the UK and US remain pretty much stagnant.
“Singapore is building on its role as the preeminent marketplace in Asia for global and regional banks, nonbank financial institutions and corporate treasurers to manage their FX risks,” said MAS Deputy Managing Director Jacqueline Loh.
“MAS is working with the industry to further enhance price discovery, liquidity and transparency in our FX market by strengthening electronic trading capabilities and anchoring market infrastructure.”
Singapore also beat out Tokyo as a top FX hub. The yuan, yen, sterling and South Korean won all recorded increases in forex trading, while the euro remained the only currency to see declines among the currencies traded in Singapore.
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