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Foreign Exchange Markets
2.23
The ranking of total gross foreign exchange market activity, as monitored by the BIS in April 1989 was as follows:
Table J: Foreign Exchange Market Survey, 1989
Average Net Daily Turnover
Ranking
US$ bn
% of total
1 2 3 4 5 6 7
UK
187
25
2
US
129
17
Japan
115
15
Switzerland
57
8
Singapore
55
7
Hong Kong Australia
49
7
30
4
2.24 Another survey has recently been undertaken covering April 1992. This shows that net daily turnover has risen by 24% in Hong Kong but by 34% in Singapore. While these growth rates are lower than the 62% increase in London they are higher than for Japan (11%). In the longer term, the unwillingness of the Singapore authorities to encourage international trading in the Singapore dollar may limit the extent to which Singapore can continue to expand as a forex centre. Also, the stability of the HK$ against the US$ via the exchange link means that, for Hong Kong too, its position as a major forex centre is probably not based on large scale activity in its own currency.
Derivatives
2.25 Singapore has developed probably an unassailable lead over Hong Kong in derivatives trading. Given the problems which have dogged derivatives trading in Hong Kong over the last five years, it seems most doubtful whether Hong Kong will catch-up with Singapore or even whether it is in Hong Kong's best interests to attempt it.
(i) Futures
2.26 In the region as a whole Japan is far more active in futures trading than either Hong Kong or Singapore, as Table K illustrates. Indeed Hong Kong futures trading is diminutive compared with Singapore, no doubt in large part a result of the aftermath of
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