Foreign Exchange Market Organization in Selected Developing and Transition Economies: Evidence from a Survey

Abstract

The foreign exchange market microstructures in developing and transition economies are characterized by the results from the IMF`s 2001 Survey on Foreign Exchange Market Organization. The survey found that these markets are usually unified onshore spot markets for U.S. dollars, where transactions are concentrated at the bank-customer level. The trading mechanisms are usually dealer or mixed dealer/auction markets; the degree of transparency is often low; settlement systems remain risky; and the scope for price discovery is variable.

Keywords: Market microstructure, foreign exchange regulation, net open foreign exchange positions

JEL Classification: E58, F31, G28