(Bloomberg) -- The Hong Kong dollar became the ninth most traded currency in the world earlier this year, ranking just below the yuan, according to the Bank for International Settlements.
The city’s currency accounted for 3.5% of global average daily turnover in April, compared with 1.7% during the same month in 2016, the latest triennial survey by BIS showed. That helped it climb four spots and nearly match the yuan, whose share rose to 4.3% from 4% in 2016.
April was a wild month for the Hong Kong dollar as a surge in borrowing costs squeezed bears and pushed it away from the weak end of its trading band. Meanwhile, the yuan was going through its dullest period in more than a year. Hong Kong also gained in prominence as a foreign exchange hub: average daily trading in the city climbed to $632 billion in April, just shy of Singapore’s Asia-leading $633 billion.
“Hong Kong’s growth reflects still-flourishing financial activities in the Hong Kong dollar market, including IPOs and debt financing,” said Ken Cheung, chief Asian FX strategist at Mizuho Bank Ltd. “Growing integration between Hong Kong and mainland China could also be a source of growth in HKD trading activities.”
The currency of the former British colony -- which is pegged to the greenback -- has strengthened 0.26% in September as stocks rebounded. The benchmark Hang Seng Index has risen 4.6% even as anti-government protests show no signs of stopping after three months.
©2019 Bloomberg L.P.
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