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Eddie Listorti, co-global head of fixed income, currencies and commodities at ANZ Group in Singapore, sees intra-Asian currency flows as a lucrative opportunity.
Global Finance: What are the main challenges facing the Asia-Pacific currency markets?
Listorti: For 2015, a key challenge for our clients will be to manage increased volatility and uncertainty, which we have been seeing in recent months, reflecting the divergence between monetary easing by the European Central Bank and the Bank of Japan versus potential tightening in the US. The latest entrant is the People’s Bank of China, which cut interest rates in late November.
GF: How are you addressing these challenges?
Listorti: We think risk management is key, for both the bank and our clients. We will also continue to benefit from the fact that our global competitors are consolidating their operations due to the regulatory squeeze they are in, and they are retrenching from what they consider noncore segments as a result.
GF: What are the most promising growth opportunities in the Asia-Pacific region?
Listorti: Intra-Asia trade flows are four times the size of those between the US and Asia. We think the opportunity here is bigger for us than the US-Asia business. The Chinese renminbi is the most significant opportunity, as both payments and trade balances will continue to grow in renminbi. Its share of global FX payments is expected to rise from 2% to 5% in the coming three years, which is a profound increase. If you consider that intra-Asia trade flows will exceed $5.5 trillion in 2014, there is significant value in providing a strong FX offering—in particular, in renminbi—in this region.