Description

This work presents the results of the triennial central bank survey of foreign exchange and over-the-counter (OTC) derivatives markets, carried out in 2019 and is coordinated by the Bank for International Settlements with the participation of 53 jurisdictions. The objective of this survey is to provide transparency and contribute to the discussion related to the global OTC derivative markets reforms since 2008. Global results from the survey indicate that trading in foreign exchange (FX) markets reached US$6.6 trillion per day in April 2019 and that derivative contracts constituted 70% of total FX activity. 

The document also presents an international comparison of the Chilean FX market with respect to three different economic blocks, highlighting its deepness after normalising for GDP, which is superior to other emerging and Latin American economies. 

Stylized facts on the Chilean FX market reveal the growth this market has experienced over recent years. Active in the market are non-residents, pension funds, insurance firms, brokers, fund managers and real sector companies, whose participation is related to their access to international capital markets and commerce. 

Furthermore, this study introduces new derivatives series by original maturity published by the Central Bank of Chile. These new series illustrate that around 50% of newly entered contracts have original maturities up to thirty days, whereas 50% of outstanding contracts extend out to one year. Final reference is made to work currently under way in the Central Bank of Chile regarding the development of a Trade Repository which will gradually begin operations towards the final quarter of 2020 and into 2021. The objectives of this new financial market infrastructure is to promote greater transparency and best-practice financial risk management, improve the decision making capabilities of investors and other stakeholders, and contribute to the supervisory processes of the Comisión para el Mercado Financiero in Chile.