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Derivatives in emerging markets

Author

Listed:
  • Dubravko Mihaljek
  • Frank Packer

Abstract

Turnover of derivatives has grown more rapidly in emerging markets than in developed countries. Foreign exchange derivatives are the most commonly traded of all risk categories, with increasingly frequent turnover in emerging market currencies and a growing share of cross-border transactions. As the global reach of the financial centres in emerging Asia has expanded, the offshore trading of many emerging market currency derivatives has risen as well. Growth in derivatives turnover is positively related to trade, financial activity and per capita income.

Suggested Citation

  • Dubravko Mihaljek & Frank Packer, 2010. "Derivatives in emerging markets," BIS Quarterly Review, Bank for International Settlements, December.
    • Handle: RePEc:bis:bisqtr:1012f
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    Citations

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    Cited by:

    1. Santiago García-Verdú & Manuel Ramos-Francia & Manuel Sánchez-Martínez, 2019. "TIIE-28 Swaps as Risk-Adjusted Forecasts of Monetary Policy in Mexico," Quarterly Journal of Finance (QJF), World Scientific Publishing Co. Pte. Ltd., vol. 9(02), pages 1-23, June.
    2. Minsuk Kim, 2019. "Financial Development, Exchange Rate Fluctuations and Debt Dollarization: A Firm-Level Evidence," IMF Working Papers 2019/168, International Monetary Fund.
    3. Ricardo Carneiro & Pedro Rossi, 2013. "The Brazilian experience in managing interest-exchange rate nexus," Competence Centre on Money, Trade, Finance and Development 1302, Hochschule fuer Technik und Wirtschaft, Berlin.
    4. Kearney, Colm, 2012. "Emerging markets research: Trends, issues and future directions," Emerging Markets Review, Elsevier, vol. 13(2), pages 159-183.
    5. Gabriel Aparici & Pablo Furche & Fernando Sepúlveda & Catherine Tornel, 2013. "Mercado de Derivados y su Infraestructura: Aspectos Relevantes de la Discusión Internacional y su Aplicación en Chile," Economic Policy Papers Central Bank of Chile 45, Central Bank of Chile.
    6. Ho, Edmund Ho Cheung, 2022. "Foreign participation in local currency government bond markets in emerging Asia: Benefits and pitfalls to market stability," Journal of International Money and Finance, Elsevier, vol. 128(C).
    7. Emira Kozarevic & Meldina Kokorovic Jukan & Beriz Civic, 2014. "The Use of Financial Derivatives in Emerging Market Economies: An Empirical Evidence from Bosnia and Herzegovina's Non-Financial Firms," Research in World Economy, Research in World Economy, Sciedu Press, vol. 5(1), pages 39-48, March.
    8. Khan, Haider, 2013. "Deep Financial Crises, Reforming the IMF and Building Regional Autonomy:Towards a New Hybrid Global Financial Architecture," MPRA Paper 49514, University Library of Munich, Germany.
    9. Khan, Haider, 2013. "Basel III, BIS and Global Financial Governance," MPRA Paper 49513, University Library of Munich, Germany.
    10. Thapa, Chandra & Neupane, Suman & Marshall, Andrew, 2016. "Market liquidity risks of foreign exchange derivatives and cross-country equity portfolio allocations," Journal of Multinational Financial Management, Elsevier, vol. 34(C), pages 46-64.
    11. Wang, Xi & Yang, Jiao-Hui & Wang, Kai-Li & Fawson, Christopher, 2017. "Dynamic information spillovers in intraregionally-focused spot and forward currency markets," Journal of International Money and Finance, Elsevier, vol. 71(C), pages 78-110.
    12. Khan, Haider, 2024. "21st Century Accelerated Dedollarization, Multipolarity and The Global South Beyond Modern Money Theory: Governance of a Complex Global Financial System in the Age of Global Instabilities," MPRA Paper 119650, University Library of Munich, Germany.
    13. Julian Caballero & Alexis Maurin & Philip Wooldridge & Dora Xia, 2022. "The internationalisation of EME currency trading," BIS Quarterly Review, Bank for International Settlements, December.
    14. Fernando Avalos & Ramon Moreno, 2013. "Hedging in derivatives markets: the experience of Chile," BIS Quarterly Review, Bank for International Settlements, March.
    15. Blaise Gadanecz & Aaron Mehrotra, 2013. "The exchange rate, real economy and financial markets," BIS Papers chapters, in: Bank for International Settlements (ed.), Sovereign risk: a world without risk-free assets?, volume 73, pages 11-23, Bank for International Settlements.
    16. Pablo G. Bortz & Annina Kaltenbrunner, 2018. "The International Dimension of Financialization in Developing and Emerging Economies," Development and Change, International Institute of Social Studies, vol. 49(2), pages 375-393, March.
    17. Michael Regan, 2017. "Capital Markets, Infrastructure Investment and Growth in the Asia Pacific Region," IJFS, MDPI, vol. 5(1), pages 1-28, February.
    18. Khan, Haider, 2013. "Global Financial Governance: Towards a New Global Financial Architecture for Averting Deep Financial Crises," MPRA Paper 49275, University Library of Munich, Germany.
    19. Christian Upper & Marcos Valli, 2016. "Emerging derivatives markets?," BIS Quarterly Review, Bank for International Settlements, December.
    20. Torsten Ehlers & Frank Packer, 2013. "FX and derivatives markets in emerging economies and the internationalisation of their currencies," BIS Quarterly Review, Bank for International Settlements, December.
    21. Philip Turner, 2012. "Weathering financial crisis: domestic bond markets in EMEs," BIS Papers chapters, in: Bank for International Settlements (ed.), Weathering financial crises: bond markets in Asia and the Pacific, volume 63, pages 15-34, Bank for International Settlements.
    22. Mashkoor, Asim & Ahmed, Ovais & Herani, Dr. Gobin, 2015. "The relationship between Foreign Currency trading and Economic Development: A case Study of Pakistan," MPRA Paper 64482, University Library of Munich, Germany.

    More about this item

    JEL classification:

    • F31 - International Economics - - International Finance - - - Foreign Exchange
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • P45 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - International Linkages

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