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Fun facts: Singapore Dollar, Singapore as foreign exchange trading centre

Singapore is the fourth largest foreign currency trading centre in the world

This is according to the Triennial Central Bank Survey of Foreign Exchange and Derivatives Market Activity in 2010 conducted by the Bank for International Settlements. The next time this survey is conducted is 2013.

According to the triennial survey, Singapore accounts for 5% of global foreign exchange market turnover. Singapore follows United Kingdom (37%), United States (18%) and Japan (6%). Switzerland (5%), Hong Kong SAR (5%) and Australia (4%) comes after.

Table of geographical distribution of foreign exchange market turnover

Turnover for UK is growing but for all trading centres, the distribution remains stable

Singapore Dollar is 12th most traded currency

The Singapore Dollar is the 12th most traded currency, out of 182 currencies used in the world. Any individual or enterprise might be encouraged by this fact because it makes the Singapore Dollar widely recognised and accepted. On the other hand, forex traders may not be too impressed because traded currency pairs involving the Singapore Dollar probably makes up 0.7% only.

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Currency pairs involving Singapore Dollar accounts up to 0.7% only

In fact traders who trade only the SingDollar currency pairs excluding the US Dollar or Euro may be a very rare species since the turnover of such pairs (non-Euro and USD pairs) add up to 4% only.

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The US Dollar and Euro is involved in 96% of all traded pairs

Other facts

  1. Singapore is only 1 of 14 countries in the world given a sovereign credit rating of AAA by Standard & Poors (as of 24 April 2013).
  2. The Monetary Authority of Singapore runs a managed floating exchange rate policy on the Singapore Dollar.
  3. “The Singapore Dollar is one of the best currencies to invest in. Between March 1981 to September 2000, the Singapore Dollar appreciated by about 20% against the US Dollar and about 25% against the Deutsche Mark.” – MAS.
  4. The Singapore Dollar went on to appreciate 54% against the US Dollar between 2001 and 2011.
  5. The strength of the Singapore Dollar as long term investment was recognised this year when Guggenheim Investments issued CurrencyShares Singapore Dollar Trust (Symbol FXSG) on 13 February 2013. It is an exchange traded fund or ETF that tracks the SGD/USD exchange rate.

This article is also published on TheFinance.sg.

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Director, TerraSeeds Market Technician Pte Ltd. Trader, investor. @sohtionghum was picked ‘Top 70 Forex Twitter in 2015’. Operates multiple strategies.

“Dear reader, I do not have a financial license to give advice. I do not know you the reader. Your financial objective and risk tolerance may be different from mine. I am not responsible for any consequence of your action.

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