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The internationalisation of EME currency trading

Author

Listed:
  • Julian Caballero
  • Alexis Maurin
  • Philip Wooldridge
  • Dora Xia

Abstract

The participation of non-residents in foreign exchange (FX) markets for emerging market economy (EME) currencies has increased to the point where these markets are almost as internationalised as those for advanced economy (AE) currencies. Nevertheless, the overall volume of trading in many EME currencies relative to economic activity remains much less than that in AE currencies. This reflects EMEs' smaller domestic investor base and lower degree of international financial integration

Suggested Citation

  • Julian Caballero & Alexis Maurin & Philip Wooldridge & Dora Xia, 2022. "The internationalisation of EME currency trading," BIS Quarterly Review, Bank for International Settlements, December.
    • Handle: RePEc:bis:bisqtr:2212g
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    References listed on IDEAS

    as
    1. Philip R. Lane & Gian Maria Milesi-Ferretti, 2018. "The External Wealth of Nations Revisited: International Financial Integration in the Aftermath of the Global Financial Crisis," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 66(1), pages 189-222, March.
    2. Andrés Fernández & Michael W Klein & Alessandro Rebucci & Martin Schindler & Martín Uribe, 2016. "Capital Control Measures: A New Dataset," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 64(3), pages 548-574, August.
    3. Mathias Drehmann & Vladyslav Sushko, 2022. "The global foreign exchange market in a higher-volatility environment," BIS Quarterly Review, Bank for International Settlements, December.
    4. Claudio Borio & Robert N McCauley & Patrick McGuire, 2022. "Dollar debt in FX swaps and forwards: huge, missing and growing," BIS Quarterly Review, Bank for International Settlements, December.
    5. Patrick McGuire & Ilhyock Shim & Hyun Song Shin & Vladyslav Sushko, 2021. "Outward portfolio investment and dollar funding in emerging Asia," BIS Quarterly Review, Bank for International Settlements, December.
    6. Wooldridge, Jeffrey M., 2019. "Correlated random effects models with unbalanced panels," Journal of Econometrics, Elsevier, vol. 211(1), pages 137-150.
    7. Andreas Schrimpf & Vladyslav Sushko, 2019. "Sizing up global foreign exchange markets," BIS Quarterly Review, Bank for International Settlements, December.
    8. Christian Upper & Marcos Valli, 2016. "Emerging derivatives markets?," BIS Quarterly Review, Bank for International Settlements, December.
    9. Dubravko Mihaljek & Frank Packer, 2010. "Derivatives in emerging markets," BIS Quarterly Review, Bank for International Settlements, December.
    10. Riju Joshi & Jeffrey M. Wooldridge, 2019. "Correlated Random Effects Models with Endogenous Explanatory Variables and Unbalanced Panels," Annals of Economics and Statistics, GENES, issue 134, pages 243-268.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Bauer, Felix & Robbert, Juliana, 2025. "A note on the geographical dispersion of emerging market currencies: The role of outliers," Economics Letters, Elsevier, vol. 253(C).
    2. Laura Alfaro & Julian Caballero & Bryan Hardy, 2025. "FX debt and optimal exchange rate hedging," BIS Working Papers 1303, Bank for International Settlements.
    3. Geyikçi, Utku Bora & Özyıldırım, Süheyla, 2023. "Deviations from covered interest parity in the emerging markets after the global financial crisis," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 85(C).
    4. Avdjiev, Stefan & Burger, John & Hardy, Bryan, 2025. "New spare tires: local currency credit as a global shock absorber," Journal of International Money and Finance, Elsevier, vol. 158(C).

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    More about this item

    JEL classification:

    • F31 - International Economics - - International Finance - - - Foreign Exchange
    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets

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