Looking for an exchange rate for money transfers to or from South Africa read the below important information:
Definition of an exchange rate for money transfers:
An exchange rate is often also described as foreign-exchange rate, forex rate or FX rate, the below applies to all of these.
A quoted exchange rate between two currencies is the rate at which one currency will be exchanged for another. It is also regarded as the value of one countries currency in terms of another countries currency. For example, an inter-bank exchange rate of 91 Japanese yen (JPY, ¥) to the United States dollar (US $) means that ¥91 will be exchanged for each US$1 or that US$1 will be exchanged for each ¥91.
What exchange rates for money transfers tell you
The actual exchange rate quoted by money exchange dealers in the retail market will usually be different for selling or buying currency. The difference between these allow for the foreign exchange dealer’s margin (or profit) in trading, or else the margin may be recovered in the form of a “commission” or other fee.
The spot exchange rate refers to the current exchange rate. The forward exchange rate refers to an exchange rate that is quoted and traded today but for delivery and payment on a specific future date.
What you need to know – don’t be misled!
Key to looking at exchange rates on the internet are the following:
- What exchange rate is actually being quoted – the interbank rate (commercial rate) or retail rate. The interbank rate is not reflective of the rate you will get – it in fact nearer or the same as the rate the foreign-exchange dealer is paying for the currency not what they are selling it to you for.
- The timing of the rate – exchange rates alter by the second and can fluctuate widely, in other words what you see is not what you might get. It is the exchange rate at the time you deal not at the time you see it.
- Exchange rates published may exclude charges or commissions – a slightly better exchange rate can still mean less in your bank account when all charges and commissions are taken into account. In some cases as much as 3-4% difference.
- It is nigh on impossible to compare apples with apples due to the fact that the exchange rate changes so much and websites are often not updated.
What should you do?
Online calculators have their place but in searching for an exchange rate but the most important thing is to compare it to the interbank rate. It is what ends up in your bank account that matters not the exchange rate in isolation from the costs and commissions that will be deducted. Speak to the foreign exchange dealer and get an exchange rate confirmation from them.
If you seek great service, no administration fees and market leading foreign exchange rates on your currency and money transfers to and from South Africa.
Contact Incompass Forex now on + 27 (0) 21 424 2936 during office hours or request call back here.