How to Exchange Currency on the Best Terms

Many people use currency exchange services, from tourists to businesses. Moreover, large financial transactions are actively carried out both online and at exchange points. The growing popularity of currency transactions should not be surprising, because in the conditions of the unstable hryvnia exchange rate, it is much safer to keep savings in a foreign equivalent.

Stable currency units include the euro, pounds of sterling, the US dollar, the Japanese yen, etc. However, the financial market is unstable. Therefore, exchange rates change according to internal or external factors and depend on the country’s GDP indicators or large-scale political events. For example, in the near future, experts predict the economic strengthening of eastern countries, there are also certain shifts in the world of virtual money, and much more. So if you want not to miss the chance of profitable money exchange – Rates is your choice.

You can exchange money at bank branches or exchange offices. In the first case, confidence and stability are guaranteed. However, exchange points always offer a favorable rate, so most customers prefer them. The only nuance is related to the fact that you need to find a reliable place. There are many exchange points in many cities. Among them, there are black market players, whose illegal structures profit from the residents and guests of the city. Secure organizations meet the following requirements:

• have a license from the national bank for permission to conduct financial activities;
• use cash register equipment and other equipment to determine the authenticity of bills;
• adhere to certain obligations regarding the safety of customers and money;
• have sufficient reserves of currency to provide services.

Avoid suspicious points with too attractive a rate, and dubious points in markets, train stations, and in underground passages. Reliable organizations do not rush customers, and help to check the accuracy of the amount received and the authenticity of each bill. And it is Rates that shows you only the exchange rates of banks and authorized institutions.

In order to understand why exchange rates fluctuate, you need to focus on:

• Trade balance. A negative trade balance indicates that more goods are imported into the country than exported. Active import of products means an outflow of foreign money, because it is necessary to pay for the goods. Therefore, there is a shortage of dollars in the domestic market, which leads to an increase in their value.
• Gross Domestic Product. Growth in production volumes leads to an increase in GDP in the country. This is considered a positive change, as the level of consumption is also increasing. Inflation is falling, the hryvnia exchange rate is becoming more stable.
• Inflation rate. Many factors can lead to an increase in inflation, in particular, a decrease in production volumes. In such a situation, the national currency is devalued.
• The volume of the state budget. The budget deficit means that the country does not have enough money to cover current needs. The government has to ask the national bank for additional money supply to cover the shortage. Due to this, the currency depreciates.
• External debt obligations. Every country has some foreign debt, mostly in US dollars. For some it is quite a significant amount, for others it is less. But this debt needs to be serviced, i.e. interest must be paid, due to which the number of dollars in the domestic market is decreasing. Accordingly, they become more expensive.

Additional reasons for changes in exchange rates

The National Bank of the country is able to smooth out exchange rate jumps. How? First, with the help of buying and selling currency on the interbank market, it regulates supply and demand. Secondly, due to changes in discount rates. If the local currency needs to appreciate, the discount rate drops, making lending more affordable. This stimulates both production and consumption among businesses and the population.

Also, exchange rates can change depending on the political situation. If there are conflicts in the international arena, and internal changes are taking place (elections, tax increases, introduction of new bills), exchange rate jumps appear.

Such services are provided by various institutions, but not all of them guarantee the reliability and transparency of the operation. The most common ways of exchanging money are as follows:

• Online services. 
• At currency exchange points.
• In bank branches.
• At the airport or hotel.

Stock trading

Trading is quite a popular field of activity. Many have mastered the techniques of stock trading and successfully speculate on currency jumps in order to make money from it.

Investments

The world economy is closely intertwined. Many foreign investors come to some countries and buy their local currency for profitable investment. There are also investors who prefer to take their capital abroad by buying foreign currency on the domestic market.

Business

Entrepreneurs and large companies constantly work with large sums of money. They can transfer them within the branches of their company, pay with information service partners or suppliers of goods, and order other services abroad.

Savings

When people feel uncertain about the future, they want to create a certain “safety cushion”. It may happen that their local currency, unfortunately, is not famous for its stability, many prefer to convert their savings into more reliable monetary units and trust more, for example, the US currency.

Moving and traveling

Before going to another country, it is better to take foreign currency with you in advance. First, it will save you time and money if you do not want to lose currency conversions when paying with your bank card. Although, for example, VISA cards are accepted in 150 countries, the conversion will be present in any case. Second, you will feel safe in a foreign place. Thirdly, many foreign tourists are cheated by money changers by pushing counterfeit bills or bills that have gone out of circulation.

So, you have faced, are facing, and will face money exchange, so you should be aware of the basic concepts in order to get the best benefit from this operation. Our advice and Rates are always ready to help you with this!