Singapore remains largest forex centre in Asia-Pacific

People look at the exchange rate at a moneychanger displaying a poster of U.S. dollar bill, Chinese Yuan and Malaysia Ringgit in Singapore in this August 24, 2015 file photo. REUTERS/Edgar Su/Files

SINGAPORE: Singapore remains the largest foreign exchange centre in Asia-Pacific and third largest globally after London and New York, according to the 2016 Triennial Central Bank Survey of the global foreign exchange and over-the-counter derivatives markets by the Bank for International Settlements (BIS).

The average daily trading volume of Singapore’s foreign exchange market was US$517bil (RM2.12 trillion) in April 2016, up 35% from US$383bil (RM1.57 trillion) in April 2013. 

Singapore’s share of global foreign exchange volume has grown to 7.9% in 2016, from 5.7% three years ago.

(Editor’s note: Malaysia is in 10th spot in Asia-Pacific, with average daily trading volume of US$8bil, down from US$11bil in 2013.)

In a statement on Thursday, Monetary Authority of Singapore’s (MAS) deputy managing director, Jacqueline Loh, said Singapore was the pre-eminent marketplace in Asia for global and regional banks, non-bank financial institutions and corporate treasurers to manage their foreign exchange risks.

“MAS is working with the industry to build further on this lead. We are looking to further enhance price discovery, liquidity and transparency in our foreign exchange market by strengthening electronic trading capabilities and anchoring market infrastructure,” she said.

The expansion in Singapore’s foreign exchange market was chiefly driven by growth in Group of 10 and Asian currencies such as the yuan (78%), yen (67%), British pound (60%) and South Korean won (55%).

Foreign exchange swaps made up the largest traded foreign exchange product class in Singapore and accounted for 48% of all trades, followed by spot (24%) and foreign exchange forwards (20%).

Interest rate derivatives market also registered strong growth, with average daily volumes surging 57% to US$58bil (RM237.2bil) in April 2016, compared to US$37bil (RM151.3bil) in April 2013, the second highest in Asia. 

The most actively-traded instruments were Australian dollar (25%), Singapore dollar (18%) and yen (13%) interest rate derivatives.

The BIS has published the preliminary global results on Thursday at http://www.bis.org/publ/rpfx16.htm?m=6%7C35), with a detailed analysis to follow in December 2016.

Central banks of many other countries are also publishing their own survey results; links to their websites can be found on the BIS website. - Bernama