Foreign Exchange Market Turnover As per the Triennial Central Bank Survey by the Bank for International Settlements on “Foreign Exchange and Derivatives Market Activity”, global foreign exchange market activity rose markedly between 2009 and 2010. The strong growth in turnover may be attributed to two related factors. First, the presence of clear trends and higher volatility in foreign exchange markets between 2001 and 2004 led to trading momentum, where investors took large positions in currencies that followed persistent appreciating trends. Second, positive interest rate differentials encouraged the so-called “carry trading”,investments in high interest rate currencies financed by positions in low interest rate currencies. The growth in outright forwards between 2009 and 2010 reflects heightened interest in hedging. Within the EM countries, traditional foreign exchange trading in Asian currencies generally recorded much faster growth than the global total between 2009 and 2010. Growth rates in turnover for Chinese renminbi, Indian rupee, Indonesian rupiah,Korean won and new Taiwanese dollar exceeded 100 per cent between April 2009 and April 2010. Despite significant growth in the foreign exchange market turnover, the share of most of the EMEs in total global turnover.