The Hong Kong Monetary Authority (HKMA) announced today (Thursday) the results of Hong Kong in the triennial survey on foreign exchange and derivatives market turnover conducted by the Bank for International Settlements (BIS) in 2016. The BIS released the global results today.
The survey results of Hong Kong showed that the average daily turnover of foreign exchange and over-the-counter (OTC) interest rate derivatives transactions increased markedly by 80.6% to US$546.3 billion in April 2016 as compared with US$302.5 billion in the previous survey conducted in April 20131.
Hong Kong advanced one place and ranked fourth in the latest survey in terms of foreign exchange market turnover. If transactions in the OTC interest rate derivatives market are included, Hong Kong’s ranking moved up two places from sixth in 2013 to fourth in 2016.
The significant growth in Hong Kong’s foreign exchange and derivatives market turnover reflects the position of Hong Kong as an international financial centre.
59 market participants (60 in 2013) took part in the 2016 survey, comprising 55 authorized institutions and 4 licensed corporations.
Foreign exchange turnover
Average daily turnover of foreign exchange transactions increased by 59% to US$436.6 billion as compared with the results of the previous survey. The growth was attributed to an increase in foreign exchange swaps (+58.4% to US$275.9 billion), followed by spot transactions(+79% to US$91.6 billion). Trading between US dollar and Japanese yen doubled and accounted for 21.2% of the total average daily turnover, up from 16.6% in 2013, surpassing US dollar against Renminbi as the most heavily traded currency pair in the local market. Trading between US dollar and Renminbi also increased markedly by 56.2%, reflecting the role of Hong Kong as the global offshore Renminbi business hub. Trading between HK dollar and US dollar increased moderately by 13.7% and accounted for 12.3% of the total average daily turnover.
OTC interest rate derivatives turnover
Average daily turnover of OTC interest rate derivatives rose strongly by 2.9 times to US$ 109.8 billion. The growth was mainly driven by interest rate swaps and interest rate options, which increased by 211.6% and 1,487.6% respectively. Most of the increases were related to contracts denominated in US dollar and Australian dollar for market-making and hedging activities.
A detailed analysis of the survey results of Hong Kong together with country comparisons will be provided in the December issue of the HKMA Quarterly Bulletin.
Hong Kong Monetary Authority
1 September 2016
1 The turnover part of the survey comprised collection of data on gross turnover in notional amounts of foreign exchange spot, foreign exchange and over-the-counter (OTC) interest rate derivatives transactions in April 2016. 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.