Topping Asia’s largest foreign exchange centre and the third-largest in the world, Singapore is home to multiple reliable and trusted forex companies. Ahead of the Asian country sits America at the number two spot with 16.5 percent of the global share of forex trading and Britain at the very top with 43.1 percent. Singapore itself holds 7.6 percent and Hong Kong close behind at 7.6 also, but boasting a lower daily trading volume.
How did Singapore climb its way to the top?
According to The Economist, “A great location, honest government and lots of foreign trade helped transform this tiny state into a regional powerhouse”. When it separated from the rest of Malaysia in 1965, it became a country with no resources or support. However, as 40% of the world’s maritime trade passes through Singapore, it built itself up under the guidance of the first prime minister, the late Lee Kuan Yew – to whom much of Singapore’s successes is accredited. He opened up the borders to international trade, encouraging foreign investments. Furthermore, he kept the government honest and transparent and small, which attributed to its success.
How the Singapore market is faring in terms of growth and diversity
There is well-diversified growth in the Singaporean market. Aside from trading Singapore dollars, the top currencies are the US dollar, the Australian dollar, Euros and the Japanese yen. Where there has been a 4% decline in the Japanese currency, the Hong Kong dollar has risen by 200 percent due to the volatility of the US dollar. According to a private banking economist, the market activity has largely been reactive. Due to the political unrest and disturbance in the West, from Brexit to Donald Trump’s comments, there has been a surge in forex volatility and the trading activity will most likely continue to rise due to it.
Singapore’s current standing in the forex trade
The lead Singapore had on Hong Kong shrunk to staying ahead by a hair. The country currently has plans to introduce electronic trading and is proposing to various financial institutions to “set up FX pricing and trading engines so that investors can reduce the time lag from routing trades elsewhere,” according to Bloomberg. This effectively competes against Hong Kong directly while also taking market share from Japan. Benny Chey, the assistant managing director of development and international at the Monetary Authority of Singapore predicts that it will take “another three to five major players to build electronic trading platforms”.
The future of Singapore’s trading economy
While nothing is ever certain, it seems that Singapore is primed to improve and will, over time, catch up to the big players ahead. United States currently has a daily turnover of US$5.1 trillion whereas the Southeast Asian country only boasts a trading volume of US$633 billion (S$870 billion). While they do have a long way to go, they are doing well in relation to the size of their country and that of the States.