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Modest Recovery in 2003
Financial Market Activity
Rise in Asian Dollar Market Lending . Box 12 – A Robust Financial System
Healthy Growth in Corporate Debt Market . Active Trading in Equities and Futures Market
Vibrant Treasury Market . Box 13 – The Singapore IPO Market
Mixed Performance for Insurance . Box 14 – Bank Loans to HDB Flat Buyers
Vibrant Treasury Market
The FX market sustained its growth momentum into 2003. Average daily trading volume picked up significantly in the first half of 2003 before moderating. Daily trading volume averaged US$119.4 billion in 2003, peaking at US$136.5 billion in the second quarter, the highest level since 1998 (See Chart 10). The surge in trading volume reflected heightened exchange rate volatility in major currency pairs such as Euro/US Dollar (USD) and USD/Japanese Yen (JPY), and coincided with a synchronised sell off in the USD amid concerns of slowing US growth, the sustainability of high US current account and budget deficits given the low interest rate environment, and the possibility of a protracted war in Iraq.

Major currencies like the USD, Euro and JPY maintained their dominance in the FX market. Trading in USD/SGD contributed almost 10% of total turnover in 2003.
Enhancing Risk-focused Supervisory Approach
Box 1 – Fostering a Sound and Progressive Financial Services Sector
Enhancing MAS’ Supervisory Capabilities
Box 2 – Stress Testing of Life Insurers
Box 3 – Streamlining Inspection Function
Thematic Inspections to Improve Surveillance