Negotiate Currency Exchange Rates?

[Firefan]

I swear I have read about it being possible to negotiate better rates with the banks for larger TT-wires into Thailand. (my search found nothing here though)

Does anybody have any experince with it? How much would one need to wire in to get a preferential exchange rate? What kind of extra compared to the TT-rate can one expect? (1%?, 0.25%? or what?).

Any experience appreciated!

Cheers!

[jimmym40]

I swear I have read about it being possible to negotiate better rates with the banks for larger TT-wires into Thailand. (my search found nothing here though)

Does anybody have any experince with it? How much would one need to wire in to get a preferential exchange rate? What kind of extra compared to the TT-rate can one expect? (1%?, 0.25%? or what?).

Any experience appreciated!

Cheers!

All I know for sure is that you can negotiate the exchange rate if cashing in "cash". I personally get from .08 - .13 depending on the amount. But the minimum amount is 3,000 US dollars and this is at my UOB Bank in Chiang Mai. I believe if you know the manager or have a large sum of money in Bangkok Bank, you may be able to get a little better rate. I found no bank to beat UOB rates.

I'm not absolutely positive, but I think on a wire transfer there is no negotiating because you will get approximately .23 - .28 higher rate automatically.

[Firefan]

Hi Jimmy!

Thanks for the reply. I did call BKK Bank telephone today and asked - and he did seem to imply that something can be negotiated - but he first asked if the wire had been done already (received) yet to which I could answer no.

Cheers!

[IMA_FARANG]

I've never heard of that...but maybe it is just I've that I never brought in the amount needed to get a preferential rate. Thai bank account interest rates are to low to keep a lot of funds in a Thai bank account for a long time, unless you have to.

I do know that if you have an account at the bank you transfer money into, the rate may be slightly better if you deposit the money for a period into that account, rather than just withdraw the amount once the funds arrive. But that is up to the bank, you have little or no control over that.

The moneychangers in Singapore, and probably Thailand too, sometimes prefer travellers checks instead of cash. If you cash travellers checks in Dollars, and the money changer expects the Dollar rate to rise in the next few days, the money cahnger will give you a slightly better rate for travellers checks instead of cash. The reason is he/she can hold those travellers checks for a few days, and then get a better rate when he/she cashes them in. On the other hand, if the money changer expects the Dollar rate to drop in the next few days, cash gets a slightly better rate than the travelers checks do. The moneychanger doesn't want to get caught with travellers checks worth slightly less than when he/she accepted them. No profit in that.

[Firefan]

Hi Ima!

Thanks for your input. Yeah - certainly not the plan to have the money standing around in the bank at those interest rates.

That said; since we have multiple bank options here, and the bank will earn both receiving fees/exchange fees as well as the bid/offer spread one could imagine that they would be willing to bargain for larger wires to arrive to their bank rather than other banks that might offer a volume discount.

Cheers!

[dinthailand]

Hi Ima!

Thanks for your input. Yeah - certainly not the plan to have the money standing around in the bank at those interest rates.

That said; since we have multiple bank options here, and the bank will earn both receiving fees/exchange fees as well as the bid/offer spread one could imagine that they would be willing to bargain for larger wires to arrive to their bank rather than other banks that might offer a volume discount.

Cheers!

Try HSBC Premier

[schlomo]

There are several private money changers in Bangkok ( most of them are Chinese ). If you need to exchange cash, their rate is much much better than the T/T rate of all other banks - usually their selling rate is very close to the buying rate of the banks

Of course you can't change just a few bucks - but 3,000 USD and more is no problem

if you need any contact details pm me. I know a few guys in that marked who i consider much more trustworthy than any bank in Thailand....

Brgds,

S.

Hi Ima!

Thanks for your input. Yeah - certainly not the plan to have the money standing around in the bank at those interest rates.

That said; since we have multiple bank options here, and the bank will earn both receiving fees/exchange fees as well as the bid/offer spread one could imagine that they would be willing to bargain for larger wires to arrive to their bank rather than other banks that might offer a volume discount.

Cheers!

Try HSBC Premier

[Sophon]

What kind of extra compared to the TT-rate can one expect? (1%?, 0.25%? or what?).

My guess would be not as much as that.

Bangkok Bank's latest posted buying/selling rates for e.g. USD are 34.83 / 35.08 so their total spread is only around 0.7%. And you could probably only negotiate a discount on the half of the spread between the mid rate and the buying rate, and that spread is not all profit but also has to cover the bank's expenses for making the trade. Maybe you could get them to cut their buying spread in half and give you a rate of 34.89 instead of 34.83 but that's just a wild guess (of course these would no longer be the actual rates when your transfer arrives).

Other currencies have different (and larger) spreads, so you could probably get a larger discount on those.

Let us know what happens.

Sophon

Edited February 1, 2009 by Sophon

[schlomo]

What kind of extra compared to the TT-rate can one expect? (1%?, 0.25%? or what?).

My guess would be not as much as that.

Bangkok Bank's latest posted buying/selling rates for e.g. USD are 34.83 / 35.08 so their total spread is only around 0.7%. And you could probably only negotiate a discount on the half of the spread between the mid rate and the buying rate, and that spread is not all profit but also has to cover the bank's expenses for making the trade. Maybe you could get them to cut their buying spread in half and give you a rate of 34.89 instead of 34.83 but that's just a wild guess (of course these would no longer be the actual rates when your transfer arrives).

Other currencies have different (and larger) spreads, so you could probably get a larger discount on those.

Let us know what happens.

Sophon

FYI:

Exchange rate of private money changer:

Exchange rate US$ to THB on 04-02-2009

Buying rate = 34.88

Selling rate = 34.92

As you can clearly see, his margin is much smaller

[Firefan]

Hi Schlomo,

Thanks for the info. 34.88 Baht/USD today with money exchanger. The cash rate at Bangkok Bank ($50-$100 notes) is Baht 34.54 so 0.30 Baht more. That is 30.000 Baht more per $100k. When buying USD the difference is also 0.30 Baht compared to BKK Bank. Or in round nos; almost 1% more.

The current TT rate from Bangkok Bank homepage is 34.79 so 0.09 Baht more than the money exchanger. Less of a difference and one can find slightly better rates than BKK Bank at other banks. Also your money changer involves purchasing dark sunglasses , Samsonite metal suit cases w. cuffs and a Land Cruiser to cross some deserted Laos/Cambodian border. (kidding - well aware that one can bring in any amount in cash as long as declare above $20k).

I went to talk with BKK Bank head office reply was weird.... Yes, I can ask for preferential rate, but only WHEN the money has arrived and is "pending" (how do I ensure it stay "pending"?) - then the officer will call and ask what the money are for and then I can ask for preferential rate.... That does not really leave me in a good negotiation situation now, does it!?

That said the preferential rate was seen as a sure thing above a certain amount (think she mentioned USD 50k?). I tried to ask how much (of the spread) one could expect to earn - but got the above cryptic (but surely logical to her) explanation. I guess one could argue that the spread could change - but still then saying E.g.: TT price +25% of quoted bid/offer spread in discount - would not be that hard.

Checking other options I looked into using Thai based USD account to receive the funds - one can then negotiate preferential rate step by step or only sell when one is satisfied with the rate - but then I presume the starting price will not be the TT-rate but rather the cash price.

The last idea was then to pull out USD from the USD account and change at your dealer - but ah! Cost 1% when pulling out USD (nothing but exchange fees when pull out Baht) so that means we are right back where we started.

Cheers!

What kind of extra compared to the TT-rate can one expect? (1%?, 0.25%? or what?).

My guess would be not as much as that.

Bangkok Bank's latest posted buying/selling rates for e.g. USD are 34.83 / 35.08 so their total spread is only around 0.7%. And you could probably only negotiate a discount on the half of the spread between the mid rate and the buying rate, and that spread is not all profit but also has to cover the bank's expenses for making the trade. Maybe you could get them to cut their buying spread in half and give you a rate of 34.89 instead of 34.83 but that's just a wild guess (of course these would no longer be the actual rates when your transfer arrives).

Other currencies have different (and larger) spreads, so you could probably get a larger discount on those.

Let us know what happens.

Sophon

FYI:

Exchange rate of private money changer:

Exchange rate US$ to THB on 04-02-2009

Buying rate = 34.88

Selling rate = 34.92

As you can clearly see, his margin is much smaller