By Jenny Ruth
Sept. 17 (BusinessDesk) - The New Zealand dollar remains the world's 10th most actively traded currency, a place it has held since 2010.
The US dollar is the world's most traded currency, accounting for 88.3 percent of all trades, followed by the euro with 32.3 percent and the Japanese yen with 16.8 percent – the total adds up to 200 percent, rather than 100 percent, because there are always two currencies involved in each trade.
The New Zealand dollar's share came in at 2.1 percent, up from 1.1 percent in 2010, although the Bank of International Settlements, which compiles the data every three years, says it may be incomplete for years before 2013 when the New Zealand dollar had a 2 percent share.
The Australian dollar ranks several places higher at fifth with a 6.8 percent share, a place it has also held since 2010 and is just behind the British pound.
The Canadian dollar, Swiss franc, Chinese yuan and Hong Kong dollars fill in the ranks between the Australian and New Zealand dollars.
Reserve Bank assistant governor Christian Hawkesby says New Zealand has had a high foreign exchange turnover to GDP ratio throughout history.
"The BIS survey is an interesting exercise which highlights that although our economy is relatively minor compared to the survey participants we are ranked against, the NZ dollar is traded with a disproportionate frequency in global FX markets," Hawkesby says.
Total trading in FX markets reach US$6.6 trillion per day in April this year from US$5.1 trillion three years earlier.
Most of the trading, 79 percent, takes place in Britain, the US, Hong Kong, Singapore and Japan, the world's major financial centres.
Trading in New Zealand's foreign exchange market was US$9.5 billion a day in April this year, down from US$10.6 billion in April 2016.