The Hong Kong Futures Exchange will proceed with plans to launch exotic Asian currency futures despite recent turmoil in the region's currency markets, exchange chairman Frank Wong Kong-shing says.
Earlier this year the exchange revealed it was considering the launch of six Asian currency futures, but rumours it was considering delaying their launch emerged as the contagion from the Thai economic crisis spread.
A number of Asian currencies including the Thai baht, the Philippine peso and the Malaysian ringgit were effectively devalued by about 20 per cent as a result of the crisis.
Mr Wong said the exchange had no intention of delaying the planned launch and argued the recent volatility demonstrated the need for hedging tools such as currency futures.
He said the Asian currencies targeted by speculators this summer made the most 'suitable' candidates for the issue of currency futures.
'Recent moves in the forex market demonstrate there is a need for hedging. The more the market moves, the more that need increases,' Mr Wong said.
He said one of the difficulties launching Asian currency futures at a time when regional markets were so volatile was finding market-makers.
