The volatility of currencies since the start of the global financial crisis has turned the simple exercise of sending money home into a stressful experience for many expatriates as they struggle to find favourable exchange rates and avoid high transfer fees. The recent plunge in the euro and the weak pound is good news for people in the UAE wanting to buy these currencies. On the flip side, the strength of, for instance, the Australian dollar, is proving to be a headache for Antipodeans, especially if they arrived in the UAE when it was relatively weak and they've had to readjust the amount of money they send home to meet financial commitments. According to oanda.com, Dh1 currently buys you A$0.31.
Opening a foreign currency account with a bank can often help offset these issues, and most in the UAE offer this service, including HSBC. A foreign currency account allows you to save money in a specific denomination, such as US dollars, the pound or the euro. Patience is key here; it is best to wait for a favourable exchange rate for your preferred currency before transferring it home. This strategy works for people who don't have financial commitments in their home countries. But what is the best approach for people who don't have the luxury of patience and have no choice but to send money home every month?
According to Emmanuel Addy, a director at the exchange rate comparison website Sendmoneyhome.org, some expatriates are seeking out currency specialists to keep their transfer fees down. "For smaller transfers of a few hundred pounds, it pays to check out some of the online providers, whose fees can be as little as 80 cents (Dh3) and whose transfers can be quicker than banks," Mr Addy told Personal Finance earlier this year.
"However, for large transfers and regular transfers such as for pensions or mortgages, foreign exchange specialists will be able to offer competitive exchange rates without charging a fee." @Email:pf@thenational.ae
