[SINGAPORE] More foreign exchange market players, including the likes of banks, asset managers and corporates, are aligning themselves with a set of international guidelines developed by the Global Foreign Exchange Committee (GFXC) – with notable additions from across South-east Asia, the Middle East and Africa.
Forum chairperson Gerardo Garcia, who also serves as the general director of central banking operations at the Bank of Mexico, said in an interview with The Business Times that there has been “a very positive note” coming from South-east Asia.
“South-east Asia is very involved in GFXC issues,” he observed. “Thailand has been more engaged and Singapore, the host of this year’s meeting, has been very engaged and committed.”
Garcia noted encouraging developments coming from the Middle East, Africa and India as well.
He was attending a two-day committee meeting held in Singapore from Thursday (Jul 3) to Friday that was hosted by the Monetary Authority of Singapore, DBS and UBS.
This is the forum’s first gathering since its publication, in December 2024, of a refreshed version of the FX Global Code – a common set of guidance and best practices that foreign exchange market players are encouraged to commit to – following a three-year review.
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The GFXC Global Index of Public Registers has reached 1,328 statements of commitment, with 37 new market participants signing up in 2024, according to the minutes from last December’s committee meeting.
GFXC’s next steps would be to woo more buy-side players.
“Most of the new signatories came from the sell side rather than the buy side, so we need to step up our efforts,” said Garcia.
“We discussed different initiatives to get more engaged with the buy-side participants – asset managers, pension funds, hedge funds – and this will certainly remain the focus of the GFXC as we move forward,” he added.
Strength amid volatility
Foreign exchange markets are being challenged by tariff tensions, bleaker macro prospects, policy uncertainty and the erosion of US exceptionalism.
The greenback had slumped some 11 per cent in the first half of 2025, marking the global reserve currency’s worst half-year performance since 1973.
On recent currency volatility, Garcia said: “There is some general recognition from the GFXC that despite the volatility that we saw at some stages over the last six months, the markets have performed well (and) foreign exchange markets have proven resilient.”
He added that there was “a very positive view” in terms of markets remaining liquid despite occasional spots of dryness, particularly across Asia, which has seen developments in market depth and products.
And while he noted that fragmentation is here to stay, he said: “It makes it a little bit more difficult to get visibility of the foreign exchange market but, at the same time, it gives you many different venues that can be sources of liquidity.”
Digital developments – or disruptions?
In an era of digital transformation, foreign exchange markets have seen the emergence of central bank digital currencies, tokenised and cryptoassets, as well as artificial intelligence-driven trading.
The way Garcia sees it, technology does not necessarily create additional risks and, instead, has created efficiencies.
“With technology, settlement can be made faster and more efficient. What it’s trying to do is precisely to get some of these processes (to happen) in a faster and more efficient way,” he said, noting that strong regulation of new features, such as stablecoins, is needed.
Added the committee’s co-vice-chair Simon Manwaring: “Most of these new innovations are probably tools for better and safer settlement, and we expect that settlement practices would continue to improve and its risk would continue to decrease.”
Co-vice-chair Stuart Simmons concluded: “GFXC will continue to focus on ensuring a fair, effective and transparent market for all market participants, big or small. We continue to persevere in creating awareness and identifying those means of motivation for participants to engage with the FX Global Code.”
