Emerging economy currencies increase global market share

Headquarters of the Bank for International Settlements (BIS) in Basel, Switzerland (Photo: BIS)

Triennial survey of foreign exchange trading by BIS shows increased market shares for several Asian currencies 


PHNOM PENH -- Emerging market economy currencies continue to increase their share of foreign exchange trading, the Bank for International Settlements (BIS) says.


The latest BIS survey of world foreign exchange turnover in April showed that emerging economy currencies were on one side of more than 12 percent of all transactions.


That compared with less than 11 percent when the previous survey was carried out in 2016.


Preliminary survey results released this week showed that daily trading in 53 jurisdictions was $6.6 trillion in April this year, up from $5.1 trillion three years ago.


Renminbi most widely-traded emerging economy currency

The Chinese renminbi remained the most widely traded emerging economy currency in the latest survey. 


The renminbi also remained the world’s eighth most-traded currency with $284 billion in daily turnover in April. 


The US dollar was on the other side of 95 percent of all renminbi transactions. 

 

“Renminbi trading increased in line with aggregate market growth, so the Chinese currency did not climb in the global rankings,” the BIS said.


Hong Kong, Korean, Indian and Indonesian currencies gain market share

“In contrast, several other Asia-Pacific currencies gained market share.”


The survey showed that turnover in the Hong Kong dollar more than doubled, climbing from 13th to ninth place in the global rankings.


“The Korean won, Indian rupee and Indonesian rupiah also moved higher in the global rankings,” the bank said.


Rankings of the top seven currencies traded did not change from 2016.


The US dollar remained the most dominant currency (on one side of about 44 percent of transactions) followed by the euro (16 percent), the yen (8 percent), the British pound (6 percent), the Australian dollar (3 percent), the Canadian dollar and the Swiss franc (both 2.5 percent) 


Market shares up in London, down in New York

Trading in April this year continued to be concentrated in London, New York, Singapore, Hong Kong and Tokyo which accounted for 79 percent of all transactions.


London’s share rose from 37 percent of all activity in 2016 to 43 percent in April this year while New York's share declined from 20 percent to 17 percent.


The share of the leading Asian financial centres fell slightly to 20 percent. 


"This was mainly driven by relatively slower growth of activity in Singapore and Tokyo,” the BIS said.


On the other hand, Hong Kong turnover grew at a higher rate than the global aggregate, raising its share by one percentage point.


China’s global ranking climbs five places

Among other trading centres, mainland China recorded a significant rise of 87 percent in daily trading activity to $136 billion in 2019.


As a result, the BIS said mainland China climbed several places in the global ranking to become the eighth largest trading centre — up from 13th place in 2016.


The bank said it would publish analyses of the latest survey results in December.


Based in Basel, the BIS has been conducting the triennial surveys with central banks around the world since 1986.  


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