Understanding Exchange Rates
Exchange and Finance Fiji Pte Limited trading as Singapore Exchange is the leading Foreign Currency Exchange House with industry experience of over 28 years.
With a total network of over 28 branches, the company employs more than 60 staff throughout Fiji.
The company was established in 1995 under the Companies Act of Fiji and Licensed by Reserve Bank of Fiji as a Restricted Foreign Exchange Dealer.
Operations Manager, Neelam Prasad said Singapore Exchange is also the Master Agent in Fiji for Money Transfer through Western Union, which is the world’s largest Money Transfer network.
“As a global leader in international money transfer business, Western Union has over 500,000 Agents across the world,” she said. “Our services enable companies of all size to manage cross border payments and assist with Foreign Exchange queries which help customers spend less time in managing their transactions.
“With personalised and customised services, we aim to empower our customers with the tools and knowledge needed to make informed decisions.”
An exchange rate is the rate at which one currency can be exchanged for another between nations or economic zones.
It is used to determine the value of various currencies in relation to each other and is important in determining trade and capital flow dynamics.
Exchange rates currencies.
For example – how many Canadian dollars (CAD) can be exchanged for one U.S. dollar (USD)?
The exchange rate as of late August 2020 is 1.31, which shows that CAD 1.31 is received if exchanging USD 1.00.
Exchange rates are defined as the price that one nation or economic zone’s currency can be exchanged for another currency. are quoted between two
The rates are impacted by two factors:
1. The domestic currency value
2. The foreign currency value
In addition, the rates can be quoted either
Ms Prasad said Singpore Exchangein Fiji was a great was to get good customers service in relation to buying and selling of foreign currencies with Western Union money directly or cross-rates. indirectly
Direct Quotation vs. Indirect Quotation
Direct quotation of exchange rates involves quoting the price of a unit of foreign currency directly in terms of the number of units of domestic currency that are exchanged.
Indirect quotation of exchange rates involves expressing the price of a domestic currency in terms of the number of units of foreign currency that are exchanged.
Cross Rates
or with the use of
Cross rates are a method of quoting exchange rates in which various foreign currency exchange rates are used to imply a domestic exchange rate, e.g., if you wanted to determine the EUR/USD exchange rate but can’t access a direct quote.
You could use the EUR/CAD exchange rate and the CAD/USD exchange rate to infer the EUR/USD rate. transfers services.
“Singapore Exchange is also providing the better rates in exchange business compared to other foreign exchange dealers,” she said.
Importance of Exchange Rates
Exchange rates capture a lot of economic factors and variables and can fluctuate for various reasons.
Some of the reasons that exchange rates can fluctuate include:
Changes in interest rates impact currency value and exchange rates.
All else being equal, a higher interest rate in a domestic country will increase the demand for a domestic currency since more foreign investors will seek to invest at the higher interest rate, thereby investing foreign capital into the domestic currency. However, in practice, it is balanced out by inflationary pressures.
2. Inflation Rates
Changes in inflation rates impact currency value and exchange rates.
All else being equal, a higher inflation rate in a domestic country will decrease the demand for the domestic currency since the value of the currency depreciates relatively faster over time than other foreign currencies.
3. Government Debt
Government debt is the amount owed by a federal government.
It impacts currency value and exchange rates since a country with higher debt is less likely to acquire foreign capital, which, in turn, leads to inflation.
It puts downward pressure on the domestic currency and decreases its value in exchange rates. of debt
4. Political Stability
The political state of a country influences the currency value and exchange rates since a country with higher political turmoil is less likely to attract foreign investors.
Political instability fosters more risk for investors, as they are unsure of whether they will see their investments protected via fair market practices or a strong legal system.
She said Singapore Exchange helps Fijians by providing them with fast and reliable services where by the customers would get the all currencies available for their request in respective to travel countries.
“Door to Door services done to operate customers in respective amounts,” Ms Prasad said.
She also said exchange rates is an important determinant of a country relative level of economic health.
“All Foreign Exchange rates are determined by Reserve Bank of Fiji rates with comparison with banks operating in Fiji,” she said.
“Very soon, we will be opening another outlet in Nausori, Suva,” Ms Prasad added.
Services provided by Singapore Exchange
Buying and selling of foreign currencies Encashment and sale of all major global currencies including Exotics and Pacific Island nation currencies
Travel Funds, Immigration Maintenance
Ancillary services and being agents for Vodafone, Digicel, Inkk mobile, for recharge and E ticketing top ups.
Agency for Fiji Sun
5. Export or Import Activities
our coto any
Gifts and
A country’s net exports or imports impact currency value and exchange rates. A domestic country that exports more goods than it imports will experience a higher demand for its currency, and thereby, will see its exchange rate increase relative to other foreign currencies.
A country that experiences a recession is less attractive to foreign investors.
Firstly, it is due to the increased risk of investing in an economy with a poor economic outlook.
Secondly, when a recession occurs, interest rates typically decrease, which decreases the foreign demand for domestic currency.
If a country’s currency is expected to rise for any reason, investors will demand more of the currency to realize a profit based on that expectation.
It can cause immediate demand increases for domestic currency relative to foreign currencies.
8. Special Considerations
Exchange rates are defined as the price that one nation or economic zone’s currency can be exchanged for another currency.
There are other special considerations when exchange rates are determined.
For example, various “safe-haven” currencies are believed to be stable and attract foreign capital when the global economic outlook is uncertain.
It includes currencies such as the U.S. dollar, euro, Japanese yen, and Swiss franc.
Another special consideration for the U.S. dollar is that it is the global federal reserve currency, which increases the baseline demand for the U.S. dollar relative to other currencies.