Settlement risk in Asian FX markets "remains high

Research published by the Bank for International Settlements calls for more extensive use of intra-regional currencies after finding that settlement risk remains high in Asian foreign exchange markets.

The paper, written by Yosuke Tsuyuguchi and Philip Wooldridge, notes: "Almost all transactions between Asian currencies are executed through the dollar so, for those trades not cleared through CLS Bank, each leg is settled at significantly different times."

The authors point out that, although

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