Foreign Exchange Trading in Emerging Currencies: More Financial, More Offshore

McCauley, Robert N.; Scatigna, Michela

Download This Paper

Open PDF in Browser

Add Paper to My Library

Foreign Exchange Trading in Emerging Currencies: More Financial, More Offshore

BIS Quarterly Review, March 2011

9 Pages Posted: 28 Aug 2012

See all articles by Robert N. McCauley

Robert N. McCauley

University of Oxford - Oxford Centre for Global History; Boston University, Global Development Policy Center

Michela Scatigna

Bank for International Settlements (BIS)

Date Written: March 2011

Abstract

Foreign exchange turnover evolves in a predictable fashion with increasing income. As income per capita rises, currency trading cuts loose from underlying current account transactions. In parallel, an increasing share of trading in the currency takes place outside the home country. At given income levels, moreover, currencies with either high or very low yields attract more trading, consistent with their role as target and funding currencies in carry trades.

JEL Classification: C82, F31, G12, G15

Suggested Citation: Suggested Citation

McCauley, Robert N. and McCauley, Robert N. and Scatigna, Michela, Foreign Exchange Trading in Emerging Currencies: More Financial, More Offshore (March 2011). BIS Quarterly Review, March 2011, Available at SSRN: https://ssrn.com/abstract=1785270