Mumbai: The Chinese currency renminbi or yuan is the largest offshore selling currency among emerging markets followed by the Singapore dollar, the Hong Kong dollar and the Indian rupee.
In a study on offshore trading in emerging market currencies in Markets in Motion (a financial technologies group initiative), M. Ravindran says the renminbi will soon catch up with the euro in two to three years.
The currencies of the emerging markets have only recently become increasingly global reflecting their growing rise as economic powers.
The renminbi is unique among all major emerging market currencies and sees an offshore trading of $86.1 billion (both spot and forward) a day equivalent to 72 per cent of its total volume globally, while the Singapore dollar is $48.8 billion, the Hong Kong dollar $40.7 billion and the India rupee $28 billion.
There are six currencies that are most actively traded globally, namely the dollar, euro, pound, yen and the Australian and Canadian dollar. Seventy per cent of the global trade is in these currencies.
Globally, the over the counter (OTC) FX spot and derivatives transactions grew by 71 per cent during 2010-13 according to the Bank for International Settlements and among emerging market currencies those of emer-ging Asia still account for almost half or 47 per cent of the total turnover.
The core participants because of the lot size include financial institutions, large national corporations and private individuals.
The UK accounts for 30 per cent of all FX OTC turnover of emerging market currencies.
