The next time you head on to a money exchanger, if you are buying a foreign currency you will be looking at the SELL rate as this is the rate which the money exchanger is selling you at. Vice-versa if you are selling a foreign currency, you will be looking at the BUY rate. You will also find that the SELL rate is higher than BUY rate. This is the spread, whereby the money exchangers make their profit from a no-commissions, no sales fee sales.
Money exchangers sometimes use figures that are sometimes confusing for you and me. Especially so when you are comparing money exchanger rates from one vendor to another and you only have one question in mind: Should a lower or higher SELL rate be lower for me?
I have personally made the mistake where I gleefully changed currencies at lower rates when actually the higher rates are better for me! I made a loss instead of what I thought was a better deal.
I share some common currencies to break the confusion. Generally, the lower the SELL rate, the better it should be for you.
Table 1: Cases where lower the rates, the better
(to buy 1 unit of)
(pay x units of SGD)
|USD||1.367||lower the better|
|AUD||0.963||lower the better|
|GBP||1.7075||lower the better|
|CAD||1.048||lower the better|
|EUR||1.5295||lower the better|
|CHF||1.39||lower the better|
|NZD||0.925||lower the better|
|JPY||0.01268||lower the better|
|LKR||0.0083333||lower the better|
For the above, what it essentially means is that to buy 1 unit of foreign currency, you need to pay x units of SGD to the money exchanger. Therefore, the lower the rate, the more bang for buck you are getting. For example, to buy 1 USD I am paying S$1.367. If another vendor offers me the rate of $1.356, this lower rate is better as I am saving 1.1 Singapore cents per USD exchanged.
Table 2: Cases where higher the rates, the better
(pay 1 unit of SGD)
(get x units of foreign currency)
|RMB||5.06||higher the better|
|HKD||5.72||higher the better|
|MYR||3.01||higher the better|
|THB||22.4||higher the better|
|TWD||22.8||higher the better|
|KWR||870||higher the better|
|PHP||35.8||higher the better|
|IDR||10220.00||higher the better|
|INR||50.50||higher the better|
|SAR||2.73||higher the better|
|AED||2.66||higher the better|
|VND||16800||higher the better|
|MMK||980||higher the better|
For the above, what it essentially means is that with 1 unit of SGD, you can buy x units of foreign currency from the money exchanger. Therefore, the higher the rate, the more bang for buck you are getting. For example, with S$1 I can buy 870 KWR . If another vendor offers me the rate of 885 KWR, the higher rate is better as I am getting 15 KWR more with each SGD exchanged.
However, not all money exchangers display the rates like they do in Table 2 all the time. They might also display the same foreign currency rates in Table 2 like in Table 3 below.
Table 3: Cases where lower the rates the better
(to buy y units of)
(pay x units of SGD)
|RMB (100)||19.37||lower the better|
|HKD (100)||17.51||lower the better|
|MYR||0.328||lower the better|
|THB (100)||4.508||lower the better|
|TWD (100)||4.48||lower the better|
|KWR (1000)||1.1603||lower the better|
|PHP (100)||2.661||lower the better|
|IDR (100,000)||9.719||lower the better|
|INR (1000)||19.33||lower the better|
|SAR||0.366||lower the better|
|AED||0.374||lower the better|
|VND (100,000)||5.92||lower the better|
|MMK (1000)||0.898||lower the better|
For the above, it is similar to Table 1. What it essentially means is that to buy y units of foreign currency, you need to pay x units of SGD to the money exchanger. Therefore, the lower the rate, the more bang for buck you are getting. For example, to buy 1000 KWR I am paying S$1.1603. If another vendor offers me the rate of $1.1501, this lower rate is better as I am saving 1.02 Singapore cents per 1000 KWR exchanged.
If you do consider selling back your foreign currencies for SGD, the reverse logic is also true when you refer back now to the BUY rate.
Phew! Will this make your life easier the next time you change foreign currencies?