Singapore is largest forex centre in Asia, third largest globally

People queuing at a money changer in The Arcade.
People queuing at a money changer in The Arcade. PHOTO: ST FILE

SINGAPORE - Singapore remains the largest foreign exchange centre in the Asia-Pacific region and third-largest globally, after London and New York, according to a new survey.

Results of the poll of global foreign exchange and over-the-counter (OTC) derivatives markets, which is held every three years, were published on Thursday (Sept 1) by the Bank for International Settlements.

The Monetary Authority of Singapore (MAS), together with the central banks and authorities of 51 other jurisdictions, conducted a survey of turnover in the OTC foreign exchange (forex) and interest rate derivatives markets in April.

It found the average daily trading volume of Singapore's foreign exchange market was US$517 billion (S$705 billion) in April, up 35 per cent from the US$383 billion of three years ago.

Singapore's share of global foreign exchange volumes has grown to 7.9 per cent in 2016, from 5.7 per cent three years ago.

This expansion was driven chiefly by growth in currencies such as the Chinese yuan, Japanese yen, British pound and Korean won.

Foreign exchange swaps made up the largest traded foreign exchange product class in Singapore, accounting for 48 per cent of all trades, followed by spot trades and foreign exchange forwards.

MAS deputy managing director Jacqueline Loh said the banking regulator "is working with the industry to further enhance price discovery, liquidity and transparency in our foreign exchange market by strengthening electronic trading capabilities and anchoring market infrastructure".

Mr Lam Kun Kin, the co-chair of the Singapore Foreign Exchange Market Committee, said a great deal of focus has been placed on improving the infrastructure and environment for electronic trading platforms and also attracting greater forex presence from regional banks into Singapore.

Mr Lam, who is also the head of global treasury and investment banking at OCBC Bank, added that Singapore's forex industry will continue to play an active role in developing and growing the offshore yuan market, as China continues to liberalise its currency regime.