Currencies in emerging-market economies ( EMEs ) are increasing their share in the global foreign-exchange turnover, rising to a new high of 29% last year, according to the latest triennial survey of FX markets by the Bank for International Settlements ( BIS ).

That’s an increase from 26% in the previous survey three years earlier and less than 10% in the early 2000s.

The Chinese renminbi ( RMB ) dominated EME forex trading, accounting for 8.8% of the global turnover, up from 7.0% in 2022. It is now the world’s fifth most-traded currency.

Conducted in April last year, the latest BIS survey – the 14th since 1986 – collected data from 1,100 banks and other dealers in 52 jurisdictions.

Overall trading in EME currencies averaged US$2.8 trillion a day – US$2.7 trillion in over-the-counter markets plus US$100 billion on exchanges.

Dollar-renminbi trades surpassed dollar-pound trades to become the world’s third most-traded pair of currencies ( behind dollar-euro and dollar-yen trades ).

The Hong Kong dollar ( HKD ) was the second most-traded EME currency at 3.8% of global turnover, up from 2.5% in 2022, followed by the Singapore dollar at 2.4% and the Indian rupee at 1.9%.

Principal trading firms and hedge funds

According to Philip Wooldridge, head of economics and financial markets for Asia and the Pacific at the BIS regional office in Hong Kong, exchange-rate volatility made an important contribution to growth in renminbi and HKD trading.

“Like for other major currencies, high volatility boosted inter-dealer activity as well as intermediation by principal trading firms ( PTFs ) and positioning by hedge funds,” the former Bank of Canada economist writes in the latest BIS Quarterly Review.

For the Chinese currency, the share of PTFs and hedge funds rose to 8% of overall activity, in line with the global average. For HKD, this share climbed to 11%.

Alongside such cyclical factors, Wooldridge says the growing trend in RMB activity is supported by its increasing use for trade and investment. 

For example, RMB-denominated cross-border bank credit to borrowers in Asian emerging markets has been rising steadily since 2021, he notes.

USD dominates renminbi deals

The US dollar remains the dominant vehicle for RMB transactions, accounting for 96% of all trades involving the Chinese currency in April last year.

Also, relative to economic activity, RMB trading “remains much lower than that in other major currencies, though it is rising quickly,” Wooldridge says.

Apart from the Chinese and Hong Kong currencies, most other EME currencies saw “relatively modest” increases in trading volumes.

“Indeed, the upward trend in [FX] turnover as a share of GDP plateaued, with turnover relative to economic activity in the median EME unchanged between April 2022 and April 2025,” he shares.  

“This moderation in growth went hand in hand with a stabilization in the share of international trading.

“Trading with non-residents had increased rapidly in the 2000s and 2010s…  In recent years, however, the international share of trading has not changed much for the majority of EME currencies.”

Faster spot market growth

Wooldridge also observes accelerated growth in spot trading between 2022 and 2025.

He attributes this to currency movements in 2025, prompting EME and other non-US investors to hedge a larger proportion of their dollar assets.

Forex derivatives are largely confined to the currencies of global financial centres – like the Hong Kong and Singapore dollars and the United Arab Emirates dirham – beyond the reach of FX and capital controls that apply to onshore transactions.

“Where controls restrict a currency’s deliverability abroad, trading fragments between onshore and offshore markets, thereby depressing market liquidity,” Wooldridge explains.

For deliverable currencies, forex swaps – used by residents and non-residents to fund and hedge their foreign investments – account for the largest share of derivatives trading. 

But for non-deliverable currencies like the Colombian peso, the Indian rupee, and the Korean won, non-deliverable forward contracts are dominant.

While authorities in some economies permit such contracts to trade onshore, they mainly trade offshore between non-residents.

Brazil, Malaysia keep derivatives onshore

Wooldridge finds that the Brazilian real and Malaysian ringgit, even though they are non-deliverable, have a relatively low share of derivatives trading offshore.

The case of the Brazilian real is unusual because futures traded on the São Paulo exchange account for a sizeable proportion of derivatives trading – in contrast to other currencies where exchange-traded futures are negligible. 

Moreover, Brazil has few restrictions on non-resident trading in real futures, which help concentrate liquidity onshore. 

It’s a similar story for Malaysia – controls are relatively liberal for non-residents, and this reduces the cost of trading ringgit onshore, Wooldridge says.

Released on September 30 last year, the preliminary findings of the latest BIS survey also include FX reaching a record US$9.6 trillion a day in April, with the dollar being on one side of 89.2% of all trades.