If you have decided on purchasing a property overseas, moving to a new country or simple investing abroad, you will need to ensure you change your money in the appropriate currency of that Country.
In the past, foreign exchange has been overlooked sometimes causing a shock to prospective purchases that don’t only have adverse effects on currency but lead to an increase in the original purchase price. The process of changing sterling into the required currency and sending it overseas has sometimes been so significant that it has become impossible to allow the purchase to complete.
Foreign Currency Explained
Depending on exchange rates €200,000 would cost £140,845 at a rate of 1.42 but would cost £136,986 based on a rate of 1.46 which is a significant difference in price. This provides a classic example. It is sometimes possible to secure a currency rate at the time of purchase which would eliminate this risk of changing currency rates enabling you to establish a fixed rate for the time of transference.
Foreign Exchange Companies
Using a foreign exchange company you can usually achieve the best rates of exchange which usually beat the rates offered by most High Street banks and building societies who provide commercial rates. Due to the amount of foreign exchange deals carried out on a daily basis the rate you can achieve is not always dependent on the size of your transaction.
In order to use a foreign exchange company you would simply need to open an account with them. They will guide you through the process and as such the paperwork involved in that in order for you to transfer your funds to the appropriate country. Dependant upon the company they will transfer your funds free of charge or will charge you a one off fee which is usually less than that what you would pay to your local bank or building society to transfer the same amount. With this it usually makes using a foreign exchange company quicker and more efficient.
You can also ask the companies to provide you with a transfer timescale which in some cases can be the same day as the funds are sent they arrive in the country you specify into a nominated bank account. This can give you piece of mind if you are in a hurry to secure a property purchase abroad. This would allow you to send a deposit therefore securing the property and taking it out of the property market.
Money transfers can be made during office hours between Monday and Friday and this is when contact with the Foreign Exchange companies can be made.
Accordingly, we at Wady Properties would always advise to compare rates offered by your local bank or building society against those offered by a reputable foreign exchange company to ensure the most efficient, inexpensive and safe way to transfer your money. We will be happy to give you the details of the reputable companies we use here on a weekly basis.
Saturday, July 28, 2007
Iraq Currency Exchange
Starting on October 15th 2003 a new national currency known as the ‘new Iraqi dinar’ will begin to replace the existing currency, the ‘old dinar’, and the currency used in the North of Iraq, the ‘swiss dinar’. The new Iraqi dinar will create a single unified currency that is used throughout all of Iraq and will also make money more convenient to use in people’s everyday lives.
The currency exchange will last from October 15th 2003 to January 15th 2004. Currency can be exchanged at any time during this three month period. Locations where money can be exchanged will include banks and other official locations, for example post offices, throughout Iraq. No fees will be charged for exchanging currency.
The conversion rates for new Iraqi dinars will be as follows:
one ‘old dinar’ will be exchanged for one new Iraqi dinar;
one unit of the ‘swiss’ dinar will be exchanged for 150 new Iraqi dinars.
Bank accounts and financial contracts in Swiss dinars will also be converted at the rate of 150 new Iraqi dinars for every one Swiss dinar. Bank accounts and contracts in old Iraqi dinar will not change.
The new currency will have a larger number of denominations than the old currency, with 50, 250, 1000, 5000, 10000 and 25,000 dinar notes, making it more convenient to use. The new notes will be of higher quality and durability than those currently in circulation and include many anti-fraud features that will provide important protection against counterfeiting.
How will the exchange occur?
(1) People will come to banks with their currency
(2) Currency will be counted and its equivalent value in new currency will be paid
(3) Old currency will be promptly marked and will then be destroyed
(4) Those with bank accounts will see their balances automatically converted. Salaries will begin to be paid in the new dinar at the earliest available opportunity.
Currently everyone in Iraq carries a reminder of Saddam in their pockets – on the banknotes they’re using. Shortly after October 15th the first batch of Saddam notes will go to the incinerator. At close of business January 15th 2004 Saddam notes will no longer be legal tender.
Below are some answers to frequently asked questions:
What will the new currency look like?
The new Iraqi dinar will look similar to Iraq’s old national dinar (the ‘Swiss’ dinar), with some minor modifications
What will be the rate that is used to convert old currency into new currency?
People who hold one old Iraqi dinar will receive one new Iraqi dinar. People who have one ‘Swiss’ dinar will receive 150 new Iraqi dinars.
Why were these rates selected?
These rates will help to equalize prices throughout all of Iraq – helping to ensure that the prices of goods will be roughly the same across the whole country. Key Iraqis, including officials at the Iraqi Central Bank as well as leaders of the autonomous regions in northern Iraq, were consulted on this issue and fully supported this decision.
How will the new currency differ from the existing currency?
The new currency will have a total of six denominations, will be much better protected against counterfeiting, and will last much longer because it will be of higher quality.
Will people need to exchange their currency immediately?
No. Currency can be exchanged at any time up until January 15th.
Will the old Iraqi dinar and the Swiss dinar continue to be valid until January 15th?
Yes. All existing currency will be completely valid until Janaury 15.
Will salaries be paid in new dinars?
Yes. After the exchange has begun, salaries will begin to be paid in new Iraqi dinars.
How will people be able to identify counterfeit currency?
As the exchange approaches additional details will be provided about how to identify counterfeit notes.
Staff at currency exchange sites will also be well trained on how to detect counterfeit Iraqi dinars
Counterfeit old Iraqi dinars will not be accepted at the exchange sites. Those presenting counterfeit notes will not be arrested or charged with a crime, but their money will not be exchanged.
Currency exchange sites will visibly mark old dinars upon their exchange for new ones so that they cannot be stolen and re-exchanged later. Once the old currency is marked it will no longer be valid currency.
Will the new currency be convertible into other currencies?
Yes. The new currency will be convertible into other currencies at the market exchange rate that prevails at that time.
Can dollars also be exchanged for new Iraqi dinars? What will be the conversion rate for dollars?
Dollars will not be converted directly into new dinars during the official exchange. Following the exchange, dollars will be convertible directly into new dinars at the market exchange rate. New dinars will also be convertible into dollars as well as other currencies at the market exchange rate.
Will it be possible to exchange currency outside of Iraq?
No. The only official currency exchange locations will be located within Iraq.
The currency exchange will last from October 15th 2003 to January 15th 2004. Currency can be exchanged at any time during this three month period. Locations where money can be exchanged will include banks and other official locations, for example post offices, throughout Iraq. No fees will be charged for exchanging currency.
The conversion rates for new Iraqi dinars will be as follows:
one ‘old dinar’ will be exchanged for one new Iraqi dinar;
one unit of the ‘swiss’ dinar will be exchanged for 150 new Iraqi dinars.
Bank accounts and financial contracts in Swiss dinars will also be converted at the rate of 150 new Iraqi dinars for every one Swiss dinar. Bank accounts and contracts in old Iraqi dinar will not change.
The new currency will have a larger number of denominations than the old currency, with 50, 250, 1000, 5000, 10000 and 25,000 dinar notes, making it more convenient to use. The new notes will be of higher quality and durability than those currently in circulation and include many anti-fraud features that will provide important protection against counterfeiting.
How will the exchange occur?
(1) People will come to banks with their currency
(2) Currency will be counted and its equivalent value in new currency will be paid
(3) Old currency will be promptly marked and will then be destroyed
(4) Those with bank accounts will see their balances automatically converted. Salaries will begin to be paid in the new dinar at the earliest available opportunity.
Currently everyone in Iraq carries a reminder of Saddam in their pockets – on the banknotes they’re using. Shortly after October 15th the first batch of Saddam notes will go to the incinerator. At close of business January 15th 2004 Saddam notes will no longer be legal tender.
Below are some answers to frequently asked questions:
What will the new currency look like?
The new Iraqi dinar will look similar to Iraq’s old national dinar (the ‘Swiss’ dinar), with some minor modifications
What will be the rate that is used to convert old currency into new currency?
People who hold one old Iraqi dinar will receive one new Iraqi dinar. People who have one ‘Swiss’ dinar will receive 150 new Iraqi dinars.
Why were these rates selected?
These rates will help to equalize prices throughout all of Iraq – helping to ensure that the prices of goods will be roughly the same across the whole country. Key Iraqis, including officials at the Iraqi Central Bank as well as leaders of the autonomous regions in northern Iraq, were consulted on this issue and fully supported this decision.
How will the new currency differ from the existing currency?
The new currency will have a total of six denominations, will be much better protected against counterfeiting, and will last much longer because it will be of higher quality.
Will people need to exchange their currency immediately?
No. Currency can be exchanged at any time up until January 15th.
Will the old Iraqi dinar and the Swiss dinar continue to be valid until January 15th?
Yes. All existing currency will be completely valid until Janaury 15.
Will salaries be paid in new dinars?
Yes. After the exchange has begun, salaries will begin to be paid in new Iraqi dinars.
How will people be able to identify counterfeit currency?
As the exchange approaches additional details will be provided about how to identify counterfeit notes.
Staff at currency exchange sites will also be well trained on how to detect counterfeit Iraqi dinars
Counterfeit old Iraqi dinars will not be accepted at the exchange sites. Those presenting counterfeit notes will not be arrested or charged with a crime, but their money will not be exchanged.
Currency exchange sites will visibly mark old dinars upon their exchange for new ones so that they cannot be stolen and re-exchanged later. Once the old currency is marked it will no longer be valid currency.
Will the new currency be convertible into other currencies?
Yes. The new currency will be convertible into other currencies at the market exchange rate that prevails at that time.
Can dollars also be exchanged for new Iraqi dinars? What will be the conversion rate for dollars?
Dollars will not be converted directly into new dinars during the official exchange. Following the exchange, dollars will be convertible directly into new dinars at the market exchange rate. New dinars will also be convertible into dollars as well as other currencies at the market exchange rate.
Will it be possible to exchange currency outside of Iraq?
No. The only official currency exchange locations will be located within Iraq.
Exchange and money transfer services
Currency exchange dealers may specialise in the following sectors; Importing fine Art, Bloodstock sales, Retail Imports, Manufacturing, Overseas Property purchase, Car Importers, Caravan Imports, Flower Importers, Marine sales.
Foreign currency for Overseas Property purchase. Foreign currency for buying houses and property abroad this year - a huge number of Britons will have looked to buy an overseas property and lots of people will purchase an overseas property within the next few years. A major factor in the purchase process is the rate of exchange when buying a property abroad. Foreign currency dealers work together with their clients to achieve the best currency exchange rates and to make the currency transfer process as simple and easy as possible, discuss this with a broker. Payments for overseas properties are uasually required in stages, either a deposit and a final payment or a series of payments. Experienced Foreign Exchange dealers help individuals with their currency payments and can offer 'spot' rates or 'forward contracts'. Many clients also take out currency mortgages and have to transfer regular monthly currency payments to pay for the currency mortgage. If you already have a property overseas and have recently sold it then you can sell the currency (euros, dollars etc) back to a Forex company who will then convert the currency and transfer the sterling into your account. Whatever your currency needs, contact a currency exchange company for advice and exchange rate quotes.
Foreign currency exchange for Importing fine Art. If you are purchasing a work of art or antiques, either as a one off or in the course of your business many companies will be interested in offering competitive currency exchange rates for euros, dollars, yen to name but a few currencies. They will then usually electronically transfer the currency, or if preferred can arrange a foreign currency draft - discuss this with the broker that you choose and they will explain the exact process.
Purchase of foreign currency for Bloodstock sales. In the equine world many horses are bought and sold globally in different currencies. FOREX Business specialists are able to offer currency exchange and transfer of funds at the best rates they can.
Buying foreign currency for Retail Imports. More and more companies are sourcing goods from different parts of the globe. The suppliers require payment in their own currency - but don't let this put you off. You can get a quote for todays exchange rates in many different currencies, including Euro, US Dollars, Bulgarian Levs, Polish Zloty and so on. Typically brokers will regularly transfer money to many countries around the world, including Europe, America, India and China and the currency is simply 'wired' into the suppliers own bank account.
Foreign exchange currency transfer for Manufacturing. Lots of UK based companies need to import either raw materials, stock or assets from abroad. Foreign exchange companies should have the facilities and knowledge to help companies do this in the most cost effective way. They can help manage the currency exchange requirements whether large or small, one currency or several currencies. They buy large amounts of foreign currency every year and are able to pass on competitive exchange rates.
Best rates of foreign currency for Car Importers. Not only can you save money when importing a car from Europe, but you can also in some cases find some rare models. Not only that, if you are importing a Mercedes Benz, importing a BMW or importing similar cars, you will often be able to take delivery sooner than if you bought it in the UK. Ask a currency broker if they can try and save you money when you pay for it in euros! You can quote you an exchange rate to convert your pounds into euros and then transfer the euros directly to the dealers international bank in time for delivery. Small amounts of money can be transferred for deposits - as well as larger payments of currency for settlement of international accounts.
Foreign currency for Caravan Imports. Many money specilaists supply a service for importers of caravans - competitive exchange rates and an efficient money transfer system. Shop around, caravan importers in UK requiring the services of a currency exchange specialist should compare several quotes, read some money market reports and consider their options of when to purchase their currency and how best to transfer it abroad. Much free advice is given and if you are well informed, you may be able to import at a cheap price.
UK Flower Importers foreign currency accounts. Many flowers on sale in UK shops were in foreign fields the day before! And the day before that the flower importer paid for them in euros supplied and transferred by a Foreign Exchange company!
Transfer of foreign currency for Marine sales. The UK is a coastal nation and sailing is a much loved and popular pastime. The coastline is full of harbours and marinas full of a variety of boats, yachts and craft. Many of them are imported from all points of the compass. Currency exchange brokers can help if you need to purchase a yacht and make a foreign currency trade whether you need euro or US Dollars.
Foreign currency for Overseas Property purchase. Foreign currency for buying houses and property abroad this year - a huge number of Britons will have looked to buy an overseas property and lots of people will purchase an overseas property within the next few years. A major factor in the purchase process is the rate of exchange when buying a property abroad. Foreign currency dealers work together with their clients to achieve the best currency exchange rates and to make the currency transfer process as simple and easy as possible, discuss this with a broker. Payments for overseas properties are uasually required in stages, either a deposit and a final payment or a series of payments. Experienced Foreign Exchange dealers help individuals with their currency payments and can offer 'spot' rates or 'forward contracts'. Many clients also take out currency mortgages and have to transfer regular monthly currency payments to pay for the currency mortgage. If you already have a property overseas and have recently sold it then you can sell the currency (euros, dollars etc) back to a Forex company who will then convert the currency and transfer the sterling into your account. Whatever your currency needs, contact a currency exchange company for advice and exchange rate quotes.
Foreign currency exchange for Importing fine Art. If you are purchasing a work of art or antiques, either as a one off or in the course of your business many companies will be interested in offering competitive currency exchange rates for euros, dollars, yen to name but a few currencies. They will then usually electronically transfer the currency, or if preferred can arrange a foreign currency draft - discuss this with the broker that you choose and they will explain the exact process.
Purchase of foreign currency for Bloodstock sales. In the equine world many horses are bought and sold globally in different currencies. FOREX Business specialists are able to offer currency exchange and transfer of funds at the best rates they can.
Buying foreign currency for Retail Imports. More and more companies are sourcing goods from different parts of the globe. The suppliers require payment in their own currency - but don't let this put you off. You can get a quote for todays exchange rates in many different currencies, including Euro, US Dollars, Bulgarian Levs, Polish Zloty and so on. Typically brokers will regularly transfer money to many countries around the world, including Europe, America, India and China and the currency is simply 'wired' into the suppliers own bank account.
Foreign exchange currency transfer for Manufacturing. Lots of UK based companies need to import either raw materials, stock or assets from abroad. Foreign exchange companies should have the facilities and knowledge to help companies do this in the most cost effective way. They can help manage the currency exchange requirements whether large or small, one currency or several currencies. They buy large amounts of foreign currency every year and are able to pass on competitive exchange rates.
Best rates of foreign currency for Car Importers. Not only can you save money when importing a car from Europe, but you can also in some cases find some rare models. Not only that, if you are importing a Mercedes Benz, importing a BMW or importing similar cars, you will often be able to take delivery sooner than if you bought it in the UK. Ask a currency broker if they can try and save you money when you pay for it in euros! You can quote you an exchange rate to convert your pounds into euros and then transfer the euros directly to the dealers international bank in time for delivery. Small amounts of money can be transferred for deposits - as well as larger payments of currency for settlement of international accounts.
Foreign currency for Caravan Imports. Many money specilaists supply a service for importers of caravans - competitive exchange rates and an efficient money transfer system. Shop around, caravan importers in UK requiring the services of a currency exchange specialist should compare several quotes, read some money market reports and consider their options of when to purchase their currency and how best to transfer it abroad. Much free advice is given and if you are well informed, you may be able to import at a cheap price.
UK Flower Importers foreign currency accounts. Many flowers on sale in UK shops were in foreign fields the day before! And the day before that the flower importer paid for them in euros supplied and transferred by a Foreign Exchange company!
Transfer of foreign currency for Marine sales. The UK is a coastal nation and sailing is a much loved and popular pastime. The coastline is full of harbours and marinas full of a variety of boats, yachts and craft. Many of them are imported from all points of the compass. Currency exchange brokers can help if you need to purchase a yacht and make a foreign currency trade whether you need euro or US Dollars.
Exchange Business FOREX
Exchange Currency FOREX site was started in 2003 in response to a growing demand for competitive foreign currency exchange rates from Companies and Individuals. 'Exchange Currency' offers information on both the typical foreign curreny transfer processes and Foreign Exchange (FOREX) Companies that offer such services. As well as currency transfers for Individuals and Corporate Treasury services, Bureau de Change and currency converter (exchange rate) services are offered online. Buoyed by the growth of the internet, comparisons of foreign currency selling and buying rates has been made very accessible with many large and small FX companies advertising such currency financial services online. Foreign Exchange Companies are able to offer competitive exchange rates as they use their volume buying power as leverage - they buy large amounts of currency annually and can therefore purchase currency at a very good exchange rate - and pass discounts on to clients offering cheaper rates than the clients may be able to recieve from their own Banks. These specialist Foreign Exchange companies concentrate on just one product and can offer great savings in both time and money. Usually the exchange rates offered by Foreign Exchange Companies compare favourably against exchange rates on offer from traditional suppliers. Currency Exchange companies usually have a team of dealers dedicated to managing the international treasury requirements for their clients providing a tailor made service to small and medium sized companies and private individuals. They use up to the minute real time rates that keep abreast of the world currency markets and so the quote will be current. Many Foreign Exchange companies have online payment systems for International payments. Online currency transfers are becoming more and more popular as many Foreign Exchange companies utilise online currency transfer systems for both individual clients and more commonly for Business Clients. Online currency transfers allow you to check exchange rates that you would be actually getting. Once the Exchange Rate is acceptable, or you have no more time then you can execute the trade at the press of a button. You can input the recieving Bank details, arrange a sterling transfer and then print off a confirmation of the order. Many Companies like the convenience of the online currency transfer system offers and most companies can input all their suppliers for all payments to them. Once set up, future money transfers to the suppliers takes only a moment online. On the other hand some people prefer to talk to a Dealer - although they can't predict the future it is often re-assuring to listen to their expertise. The Currency Dealer also gets to know the clients needs and can act in a pro-active manner if he feels the exchange rate is favourable for certain clients. Some prefer the convenience of making international payments online, whilst others prefer to converse with a Foreign Exchange Dealer. All manner of companies may be helped with their foreign exchange requirements using a currency exchange company. FOREX Brokers supply global currencies - Euro, Dollar, Yen, Rand, to numerous types of international organisations from manufacturers, furniture importers, florists, fashion companies to car importers, people buying properties abroad and families emigrating overseas. Wire transfers and Currency bank drafts have always been an expensive and time-consuming process. Despite the advent of the Internet and Telephone Banking, this is one area of finance which has not moved forward. What to look for with Foreign currency Treasury Services; Highly competitive cheap foreign currency exchange rates using a currency converter giving up to datecompetitive world currency exchange rates. Currency converters mark every change in the money markets and form the basis of each currency trade. Look for No transaction fees for amounts of over £5,000 GBP of foreign currency. Direct access to FOREX dealers by phone and online and todays and historical currency exchange rates - often offered on charts online. Immediate fixed price real-time international foreign currency quotations. Personal care and attenion to your currency exchange requirements at all times. Spot or forward foreign currency exchange contracts avaiable - book your foreign money when the currency rate is cheap! 'Bureau de change' money exchange counters are no longer just found in towns and cities around the UK. The competitive currency exchange rates offered and a friendly service that many small and large companies offer has contributed to growth of this industry. A real time foreign currency converter and is able to offer up to the minute currency exchange rates. In UK, London, Edinburgh and Glasgow are extremely popular tourist destinations and there are many bureaus offering currency exchange services in these financial centres as well as at airports, train stations and on the high street. Forex Brokers will be pleased to change foreign currency using their online currency converter for people from around the globe wanting to transfer money. Their customers use their services to change Euros, to exchange Dollar's, to change Yen as well as to convert foreign currency from the rest of the world offering FOREX real time dealing. A currency Broker in a dealing room generally shares his daily market news report on what's happening in the foreign exchange market and historic currency exchange rates. Contact a broker for today's best tourist and business currency exchange rates.
The Foreign Exchange Process - An Overview
This overview is targeted at those who are unfamiliar with the deliverable foreign exchange (FX) process. For the overview, we will assume that you are a business in New Zealand and need to pay a supplier in Japan. Your supplier requires you to pay her in Japanese Yen (JPY). This is just an example - you can buy and sell a variety of currencies using Elldridge Lynch, and send funds to many different countries. In many cases, you might simply want to transfer your money between your accounts in different countries.
The Basic Process
Every foreign exchange transaction involves the buying of one currency and the selling of another. To make the payment to your supplier in Japan, you will need to buy Japanese Yen from Elldridge Lynch. Given that this example assumes you are in New Zealand, you will most likely want to trade New Zealand Dollars (NZD) for the Yen. Thus, you will sell New Zealand Dollars to Elldridge Lynch. Following payment of your NZD, Elldridge Lynch then pays your supplier in Japan as per your instructions.
Spot Contracts
The most common type of deliverable FX transaction is a Spot contract. When you need to buy currency immediately, and at the prevailing market rate, you enter a Spot contract with Elldridge Lynch. You can also enter a Forward contract, or place an Order to attempt to benefit from favourable market movements. Forward contracts and Orders are discussed in a later section.
Your supplier has invoiced you for ¥250,000. To determine how much this will cost you in New Zealand Dollars, you log in to the Elldridge Lynch online trading platform to request a live rate. You specify that you need to buy JPY 250,000 and that you will be selling NZD to pay for the Yen.
In this example, the rate offered is 74.84 Yen to each NZD, meaning that the ¥250,000 will cost NZD$3340.46. You can sit and watch the offered rate move with the market. The value date for the contract is the date on which the contract will be executed and depends on the means by which you will be paying the sold currency to Elldridge Lynch. Typically, the spot date is two trading days in the future.
If you are happy with the rate and decide to proceed, you then enter a spot contract with Elldridge Lynch. At this point, you can specify how the purchased currency is to be disbursed. You might choose to hold it in your JPY account with Elldridge Lynch, or you might choose to disburse some or all of the funds to a nominated beneficiary you have created earlier (you can also create a new beneficiary at this stage). The beneficiary bank details are specified when you create the beneficiary. Given that you need to pay your supplier in this example, you will either select them from the list of available beneficiaries, or create them as a new beneficiary and specify that they are to receive the entire proceeds of the contract.
Your account balances are updated to reflect the current transaction. Your sold currency account (NZD) will be debited, and your purchased currency account (JPY) will be credited (if you held the funds on account, they will not be available until the contract is settled).
Settling a Contract
At this point, you need to settle the contract by submitting the amount of the sold currency (NZD$3340.46) to Elldridge Lynch as per the specific instructions on the contract. All the details you require, including the bank name, branch, and account number are found in the settlement instructions section of the contract.
Forward Contracts
Forward contracts are similar to spot contracts in that the transaction is executed at the prevailing market rates. The difference is that the value date of the contract might be weeks or months in the future. You specify the forward value date when you request a rate for a forward contract. Forward contracts also typically require that a US Dollar equivalent minimum is met (usually about USD$15,000).
When you enter a forward contract, a percentage (typically 10%) of the value of the contract is to be paid immediately, while the balance is paid one trading day before the value date of the contract. Disbursement of the contract proceeds is the same as with spot contracts.
Orders
To attempt to benefit from favourable movements in the market, or to mitigate losses from unfavourable movement, you can place a trade order with Elldridge Lynch. Using our online facility, you can identify current market rates and determine the saving or cost involved should the market reach the order rate you specify.
The orders you place are monitored by Elldridge Lynch and are automatically executed if the market hits the nominated rate. The order management facility we provide allows you to amend or cancel orders as you desire during trading hours.
Further Information
If you do not have an account with Elldridge Lynch and would like to experiment with our online platform, you can register for a demo account here. Registration for a demo account takes less than 5 minutes and allows you to begin experimenting with our platform immediately
The Basic Process
Every foreign exchange transaction involves the buying of one currency and the selling of another. To make the payment to your supplier in Japan, you will need to buy Japanese Yen from Elldridge Lynch. Given that this example assumes you are in New Zealand, you will most likely want to trade New Zealand Dollars (NZD) for the Yen. Thus, you will sell New Zealand Dollars to Elldridge Lynch. Following payment of your NZD, Elldridge Lynch then pays your supplier in Japan as per your instructions.
Spot Contracts
The most common type of deliverable FX transaction is a Spot contract. When you need to buy currency immediately, and at the prevailing market rate, you enter a Spot contract with Elldridge Lynch. You can also enter a Forward contract, or place an Order to attempt to benefit from favourable market movements. Forward contracts and Orders are discussed in a later section.
Your supplier has invoiced you for ¥250,000. To determine how much this will cost you in New Zealand Dollars, you log in to the Elldridge Lynch online trading platform to request a live rate. You specify that you need to buy JPY 250,000 and that you will be selling NZD to pay for the Yen.
In this example, the rate offered is 74.84 Yen to each NZD, meaning that the ¥250,000 will cost NZD$3340.46. You can sit and watch the offered rate move with the market. The value date for the contract is the date on which the contract will be executed and depends on the means by which you will be paying the sold currency to Elldridge Lynch. Typically, the spot date is two trading days in the future.
If you are happy with the rate and decide to proceed, you then enter a spot contract with Elldridge Lynch. At this point, you can specify how the purchased currency is to be disbursed. You might choose to hold it in your JPY account with Elldridge Lynch, or you might choose to disburse some or all of the funds to a nominated beneficiary you have created earlier (you can also create a new beneficiary at this stage). The beneficiary bank details are specified when you create the beneficiary. Given that you need to pay your supplier in this example, you will either select them from the list of available beneficiaries, or create them as a new beneficiary and specify that they are to receive the entire proceeds of the contract.
Your account balances are updated to reflect the current transaction. Your sold currency account (NZD) will be debited, and your purchased currency account (JPY) will be credited (if you held the funds on account, they will not be available until the contract is settled).
Settling a Contract
At this point, you need to settle the contract by submitting the amount of the sold currency (NZD$3340.46) to Elldridge Lynch as per the specific instructions on the contract. All the details you require, including the bank name, branch, and account number are found in the settlement instructions section of the contract.
Forward Contracts
Forward contracts are similar to spot contracts in that the transaction is executed at the prevailing market rates. The difference is that the value date of the contract might be weeks or months in the future. You specify the forward value date when you request a rate for a forward contract. Forward contracts also typically require that a US Dollar equivalent minimum is met (usually about USD$15,000).
When you enter a forward contract, a percentage (typically 10%) of the value of the contract is to be paid immediately, while the balance is paid one trading day before the value date of the contract. Disbursement of the contract proceeds is the same as with spot contracts.
Orders
To attempt to benefit from favourable movements in the market, or to mitigate losses from unfavourable movement, you can place a trade order with Elldridge Lynch. Using our online facility, you can identify current market rates and determine the saving or cost involved should the market reach the order rate you specify.
The orders you place are monitored by Elldridge Lynch and are automatically executed if the market hits the nominated rate. The order management facility we provide allows you to amend or cancel orders as you desire during trading hours.
Further Information
If you do not have an account with Elldridge Lynch and would like to experiment with our online platform, you can register for a demo account here. Registration for a demo account takes less than 5 minutes and allows you to begin experimenting with our platform immediately
FXConverter - Currency Converter for 164 Currencies
FXConverter is a multilingual currency converter for over 164 currencies and 3 metals. It uses daily OANDA Rates®, the touchstone foreign exchange rates used by corporations, tax authorities, auditing firms, and financial institutions. These filtered rates are based on information supplied by leading market data contributors.
Universal Currency Converter
This is the XE.com Universal Currency Converter ®, the world's most popular currency tool. You can perform interactive foreign exchange (FX, or forex) rate calculations, using live, up-to-the-minute currency rates. To make on-line foreign exchange transactions with guaranteed best rates, use XEtrade, our discount on-line foreign exchange system. To speculate on the Forex Market, try XE.com Forex Speculation, a service that allows you to buy and sell foreign exchange positions in real time.
To start, simply type the value of currency to convert in the amount box. You may include commas and a decimal point. Next, select the source and destination currencies using the scrolling selection boxes. Currencies that are obsolete -- or that are being phased out -- will be indicated by an asterisk (*). When you are finished, push the "Go!" button, and the results of your conversion will be displayed.
For ease of use, the top ten currencies sorted by popularity are listed first. Next come the top 85 currencies sorted by country name. Special units and precious metals are listed both alphabetically as well as in their own sections at the end of this list. If you need more currencies, you can get every world currency through the XE.com Full Universal Currency Converter.
To start, simply type the value of currency to convert in the amount box. You may include commas and a decimal point. Next, select the source and destination currencies using the scrolling selection boxes. Currencies that are obsolete -- or that are being phased out -- will be indicated by an asterisk (*). When you are finished, push the "Go!" button, and the results of your conversion will be displayed.
For ease of use, the top ten currencies sorted by popularity are listed first. Next come the top 85 currencies sorted by country name. Special units and precious metals are listed both alphabetically as well as in their own sections at the end of this list. If you need more currencies, you can get every world currency through the XE.com Full Universal Currency Converter.
Subscribe to:
Posts (Atom)