Performance and Growth FINANCIAL MARKET ACTIVITY Strong Growth in the Treasury Market The FX market grew strongly in the second half of 2004 with year-on-year growth rates of over 30%. The growth persisted into the first quarter of 2005. As a result, average daily turnover surged from US$156 billion in the second quarter of 2004 to US$184 billion in the first quarter of 2005, the highest level since 1997 (See Chart 12). The turnover increase in the first quarter of 2005 was concentrated in January and February 2005, and appears to be largely among SGD and other currency pairs. Turnover in the SGD/British Pound (GBP) pair, for example, doubled in January from a year ago, while the turnover in the SGD/US Dollar (USD) rose by 64%. The phenomenon was likely the result of strong portfolio inflows into Singapore and other South-East Asian capital markets at the beginning of the year. The period also saw a reversal of the sharp USD depreciation in the fourth quarter of 2004, and this may also have contributed to the high turnover volumes in early 2005. Trade in the major international currencies such as USD, EUR and Japanese Yen (JPY) continued to dominate the market.