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

9 Pages Posted: 28 Aug 2012  

Robert N. McCauley

Bank for International Settlements (BIS)

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

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

Robert N. McCauley (Contact Author)

Bank for International Settlements (BIS) ( email )

CH-4002 Basel, Basel-Stadt
Switzerland

Michela Scatigna

Bank for International Settlements (BIS) ( email )

Basel, 4002
Switzerland

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