Trent Beacroft
Trent Beacroft

The growing electronification of the NDF Market

By Trent Beacroft, CEO of Euronext Markets Singapore

As financial markets globally continue to develop their electronic trading capabilities it only makes sense that even the more illiquid and opaque instruments come under a similar focus. The NDF market gathered steam in the 90’s taking its fundamentals from the early AUD Hedge market that existed prior to the float in December 1983. The need for NDF’s was a simple one. As economies developed so did their investment / commercial flows the problem was that many of these emerging countries did not have sufficiently developed economies or capital markets from which to launch an internationalized exchange rate. So whilst these investment flows were welcomed, the same could not be said of the potential economic volatility that would accompany it. Even while EM regulators held firm on their pegged / managed exchange rate regime and limited trading to domestic entities they also recognized that foreign investors and non-resident firms needed the ability to manage their currency...continued

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