Prof. Jayanth R. Varma's Financial Markets Blog

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Prof. Jayanth R. Varma's Financial Markets Blog, A Blog on Financial Markets and Their Regulation

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Thu, 02 Dec 2010

Where is the rupee-dollar market?

In two blog posts three months ago, I put together data from the BIS and the RBI to suggest that half of the rupee-dollar market is outside India. Now we have the data from the BIS. Table D.6 gives the location wise break up of the rupee-dollar market: 50% is in India, 16% is in Singapore, 12% in UK, 11% in Hong Kong, and 9% in the US with the balance scattered across four countries (Switzerland, Australia, Japan and Canada) each with less than 0.5%. The offshore market exceeds $20 billion a day.

One of the reasons most people underestimated the size of this market is that they were looking only at Singapore, while the market is spread across several locations.

Posted at 21:09 on Thu, 02 Dec 2010     View/Post Comments (3)     permanent link