SINGAPORE (Sept 17): The Monetary Authority of Singapore (MAS) announced that Singapore’s average daily foreign exchange (FX) trading volume has increased by 22% to reach an all-time high of US$633 billion ($871 billion) from US$517 billion in April 2016.

With this, Singapore will keep its position as one of the world’s largest FX centres. It is ranked third with a 7.6% share of global FX volume in April.

Across G10 and emerging market currencies, Singapore’s FX market saw a broad-based growth, which reflects on the city state’s standing as a well-diversified international financial centre. The top five traded currencies in Singapore were the US dollar, Japanese yen, Euro, Australian dollar and Singapore dollar.

The trading volumes for the currencies have increased between 24% to 45% in 2019 from 2016, except for the Japanese yen which saw a 4% drop in volume.

In terms of FX instruments, spot and FX swaps turnover increased strongly by 26% and 35% respectively over the two survey periods. FX options and currency swaps increased by 9% and 6% in volume respectively, while forwards turnover declined 6% from 2016 to 2019. FX swaps accounted for 53% of average daily turnover, up from 48% in 2016, followed by spot (24%) and forwards (15%).

Meanwhile, OTC interest rate derivatives market continued to show strong growth, with average daily volumes jumping 87% to US$109 billion in April 2019, compared to US$58 billion in April 2016.

The most actively traded instruments in Singapore were Australian dollar (32%), US dollar (21%), and Singapore dollar (9%) interest rate derivatives.

Jacqueline Loh, deputy managing director of MAS, says, “This is a good reflection of the diversity of market participants in the Singapore FX ecosystem. Global and regional FX players continue to expand their regional footprint in Singapore and are investing heavily in building up their skills and trading infrastructure, including in FX e-trading. We expect these investments to bear fruit in the medium term and further improve the trading landscape for market participants and enhance price discovery, liquidity and transparency in the Asian time zone.”