south-north development monitor SUNS [Email Edition]

SUNS #4433, Tuesday 11 May 1999


Finance: BIS triennial survey shows growth in speculation (Chakravarthi Raghavan, Geneva)

Africa: Second most unequal region (IPS, Addis Ababa)

Trade: Int'l network against WTO to stage protests in US (IPS, Geneva)

Trade: Mercosur Summit ends with call for closer ties to EU (IPS, Santiago)

Brazil: Twentyfour banks raked in $6 billion in 20 days (IPS, Rio de Janeiro)

Mexico: Informal Sector - a billion-dollar lifebelt (IPS, Mexico City)

Environment: Influencing corporate policy (IPS, Washington)

Development: US plan to lay landmines in Kosovo criticised (IPS, Maputo)

Excerpts from some selected articles:

Finance: BIS triennial survey shows growth in speculation

Geneva, 9 May (Chakravarthi Raghavan) -- The daily global turnover of transactions on foreign exchange markets (spot, forwards and swaps) reached an estimated $1.5 trillion in April 1998, while that of foreign exchange and interest rates traded in over-the-counter (OTC) reached $1.3 trillion, according to the Bank of International Settlements (BIS).

Put in perspective, in terms of world trade and real activity, according to the World Trade Organization, exports of merchandise and commercial services in value terms over the entire year of 1998 was $6.5 trillion - $5.2 trillion of goods exports and $1.3 trillion of services exports.

The BIS data, covering some 43 countries, is in the triennial Central Bank Survey of Foreign Exchange and Derivatives Market Activity published Monday.

Corrected for the dollar value of non-dollar transactions, the growth in foreign exchange markets transactions represented 46% over that of the 1992-1995 triennium. And in constant dollars, the OTC activity represented a 66% growth over April 1995.

Because of the larger number of countries included in the survey (43 compared to the 26 in 1995), as well as the shift in the reporting date to ensure consistency in the derivatives market data in the G-10 countries, BIS notes that the data between the two triennial surveys are not strictly comparable.

On the face of it at 26%, the growth in foreign exchange market transactions between 1995-1998 suggests a slowdown from the 45% of 1992-1995, but when adjusted for differences in dollar value of non-dollar transactions the growth was 46% compared to 29% in the earlier period.

The notional amounts outstanding on the OTC trade at end of June 1998 i.e. global positions in OTC financial derivatives contracts covering all kinds of risk stood at $72 trillion.

Adjusted for differences in exchange rates and change from locational to consolidated reporting (adopted in the latest triennial report), the notional amounts outstanding represents an increase of 130 percent over that since end-March 1995.

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