Results of the Bank for International Settlements Triennial Survey of Foreign Exchange and Derivatives Market Turnover

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05 Sep 2013

Results of the Bank for International Settlements Triennial Survey of Foreign Exchange and Derivatives Market Turnover

The Hong Kong Monetary Authority (HKMA) announced today (Thursday) the Hong Kong results of the Bank for International Settlements (BIS) triennial survey on foreign exchange and derivatives market turnover1.  The BIS is releasing the preliminary global results today.

The Hong Kong survey results showed that the average daily turnover of foreign exchange transactions and OTC interest rate derivatives increased by 18.2% to US$302.5 billion in April 2013 as compared with US$256.0 billion in the previous survey conducted in April 2010. 

Hong Kong, in the survey conducted in 20132, advanced 1 place and ranked fifth in the global foreign exchange market.  If transactions in the over-the-counter (OTC) interest rate derivatives market are included, Hong Kong’s ranking moved up from seventh in 2010 to sixth in 2013. 

Foreign exchange turnover

Average daily turnover of foreign exchange transactions increased by 15.6% to US$274.6 billion as compared with the results of the previous survey conducted in 2010.  The growth was attributed to the increase in foreign exchange swaps (+18.4% to US$174.1 billion), followed by spot (+16.9% to US$51.2 billion) and outright forwards (+16.5% to US$37.3 billion).

Trading between US dollar and Renminbi rose by 3.6 times to account for 17.7% of total average daily turnover, up from 4.5% in 2010, surpassing Hong Kong dollar against US dollar as the most heavily traded currency pair in the local market.  This reflects the significantly increased use of Renminbi in trade and investment activities.  Foreign exchange trades involving offshore Renminbi (CNH) were around 63% of all Renminbi trades, reflecting the sound development of Hong Kong as an offshore Renminbi centre.  The currency pair of Hong Kong dollar against US dollar fell to second place with a share of 17.2%, followed by US dollar against Japanese yen with a share of 16.6%.  During April 2013, both the exchange rate between the Hong Kong dollar and US dollar and the spread between the interest rates of the two currencies remained very stable, and there were abundant liquidities in both currencies.  In addition, the stock trading and IPO activities were generally lower in April 2013 compared with April 2010.  These factors should contribute to the lower volume of foreign exchange and hedging activities involving Hong Kong dollar.

OTC interest rate derivatives turnover

Average daily turnover of OTC interest rate derivatives rose strongly by 51.1% to US$27.9 billion.  The growth was driven by interest rate swaps, which increased by 49.7%.   Interest rate options and forward rate agreements also grew notably by 62.0% and 52.1% respectively, but in notional amounts their contribution were modest compared with that of interest rate swaps.

Compared to 2010, Hong Kong dollar denominated contracts fell by 44.6% in 2013 mainly due to the lower volume of hedging activities involving Hong Kong dollar as explained above.

A detailed analysis of the Hong Kong survey results together with country comparisons will be provided in the December issue of the HKMA Quarterly Bulletin

Annex


Hong Kong Monetary Authority
5 September 2013


 

 1 The turnover part of the survey comprised collection of data on gross turnover in notional amounts of foreign exchange spot, foreign exchange and interest rate over-the-counter (OTC) derivatives transactions in April 2013.  Data were reported on a “locational” basis, i.e. based on the location of the sales desk of a deal.  Turnover figures have been adjusted to exclude double counting of figures reported by local inter-dealer.

2  In Hong Kong, 60 market participants (67 in 2010) took part in the survey, comprising 58 authorized institutions and 2 major securities houses.

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Last revision date : 05 September 2013