Why are the bank exchange rates on Arab currency so bad?

[rott]

My simple point was that for all intents and purposes there is a basic equation gbp/usd  // usd/thb = gbp/thb.

 

This is what happens. It is not coincidence.

 

If I am wrong it will be easily proved. This is not some woolly headed theory, we are talking hard figures.

 

 

Thank You sandyf

[chiang mai]

1 hour ago, rott said:

My simple point was that for all intents and purposes there is a basic equation gbp/usd  // usd/thb = gbp/thb.

 

This is what happens. It is not coincidence.

 

If I am wrong it will be easily proved. This is not some woolly headed theory, we are talking hard figures.

 

 

Thank You sandyf

 

Not so, your point in post #8 was that, " Every currency is linked to $U.S, " , I refute that and your point remains unproven.

 

If you now say, "there is a basic equation", what is it and how does it operate?

 

Your "gbp/usd  // usd/thb = gbp/thb" is meaningless in mathematical and forex terms so you'll need to describe it's operation, for example, how is GBP linked to USD?

[chiang mai]

Having re-read the thread I stand corrected, I had read the above as it being you who had made the statement that all currencies are linked to USD (post 8), it was in fact another poster hence your point was unconnected to it, I was attempting to disprove the original point believing it that what followed was part of it, my reading error.

[rott]

Hello there chiangers, nice to see that you are speaking to me again, rude git that I am.

 

I will attempt to clarify the equation though I feel that your problem comes from being a trifle obtuse, rather than my wording.

 

I suspect that you are employing what Thomas Aquinas described as "cultivated ignorance" that is "a wilful lack of knowledge to protect oneself". I am not an RC, but occasionally one of them does make a good point.

 

I repeat "to all intents and purposes" and I am talking about buying baht in Thailand. Right then, if you take the number of thb you get for one usd and multiply it by the amount of usd you get for one gbp you will have the amount of thb to one gbp. I have difficulty believing that you do not already grasp this. Whichever branch of Super Rich, TT or bank you go to this principle will apply.

 

I think that the other poster was applying this principle to all currencies and probably he is correct.

 

Possibly you could respond to post 25 among others when you respond to this.

Edited December 3, 2016 by rott

[chiang mai]

20 minutes ago, rott said:

Hello there chiangers, glad to see that you are speaking to me again, rude git that I am.

 

I will attempt to clarify the equation though I feel that your problem comes from being a trifle obtuse, rather than my wording.

 

I suspect that you are employing what Thomas Aquinas described as "cultivated ignorance" that is "a wilful lack of knowledge to protect oneself". I am not an RC, but occasionally one of them does make a good point.

 

I repeat "to all intents and purposes" and I am talking about buying baht in Thailand. Right then, if you take the number of thb you get for one usd and multiply it by the amount of usd you get for one gbp you will have the amount of thb to one gbp. I have difficulty believing that you do not already grasp this. Whichever branch of Super Rich, TT or bank you go to this principle will apply.

 

I think that the other poster was applying this principle to all currencies and probably he is correct.

 

On this issue we both started from different points, I was continuing a point that was raised by another poster before you who claimed all currencies are dependent on USD,  and mistakenly believed your comments were a continuation of that argument. Some of your extraneous comments were unhelpful to me being able to recognise that oversight on my part. End of.

 

As far as the GBP/USD/THB issue is concerned: all Sandy and yourself have done is to document an observation which most people will agree with (except Alfie perhaps), nobody has recorded why and how that happens. Yes of course the circle is squared as you point out and there is no dispute about that, were it not then everyone would be taking advantage of it. However, holding large amounts of USD in foreign currency reserves as Sandy suggests is not in itself a reason why THB should strengthen, unless that USD is actually employed somehow and provides the vehicle that effects THB value, if somebody can demonstrate how and why that should be the case it would be most helpful. 

[rott]

I do believe you now have it right mate.

 

This however still does not explain your inexplicable comment comparing gbp/thb rates in UK and Thailand. But I will be charitable and assume you are speaking at the macro level while I am thinking of the dodgy looking bureaux de change around central London.

[chiang mai]

9 minutes ago, rott said:

I do believe you now have it right mate.

 

This however still does not explain your inexplicable comment comparing gbp/thb rates in UK and Thailand. But I will be charitable and assume you are speaking at the macro level while I am thinking of the dodgy looking bureaux de change around central London.

 

Which post?

[rott]

On 12/1/2016 at 8:45 AM, chiang mai said:

 

Exchange rates in Thailand are excellent, if you want to see how poor they can get, go to the UK.

This one.

[rott]

On 12/1/2016 at 9:34 AM, rott said:

We are talking about the exchange rate not a fixed link/track between currencies.

 

The gbp/thb rate is a direct reflection of usd/thb and gbp/usd exchange rates.

 

To give you a clue this thread is about exchange rates.

 

Now admit (if only to yourself) that you are wrong and move on. Possibly you can advance some theory as to why there is such a gap between bank exchange rates and the likes of SuperRich (Bangkok) and TT (Pattaya).

You responded to this post while completely ignoring it and two days later implied that my point is so simplistic it is beneath you to mention it.

[chiang mai]

2 minutes ago, rott said:

This one.

 

OK, the average bank exchange rate of GBP/THB in Thailand is currently 44.48 - https://daytodaydata.net/

 

The exchange rate of GBP/THB at say HSBC UK is currently 41.68 - https://www.tmo.hsbc.co.uk/hsbc/JSMain.asp

 

[rott]

Come on chiangers, enough of this bickering let's be mates.

 

I see that you have responded while i am doing this so have not yet read it.

[chiang mai]

1 minute ago, rott said:

You responded to this post while completely ignoring it and two days later implied that my point is so simplistic it is beneath you to mention it.

 

You only get one explanation and one apology and you've had them already, if you want to keep pushing the same thing over again we're not going to be friends.

[rott]

4 minutes ago, chiang mai said:

 

OK, the average bank exchange rate of GBP/THB in Thailand is currently 44.48 - https://daytodaydata.net/

 

The exchange rate of GBP/THB at say HSBC UK is currently 41.68 - https://www.tmo.hsbc.co.uk/hsbc/JSMain.asp

 

My post seems to have disappeared but i said you have to be a complete know-nothing to buy more than a nominal amount of baht in London That applies to both notes and transfers.. Could just be that there is more demand for sterling than baht.

[rott]

I speak to people who regularly draw on a UK visa card, but are vague about exchange rates and fees. Do they get the bank note rate from the bank whose atm they use, the TT rate or what? And how do the fees work out. Say for an amount of 200 gbp?

[chiang mai]

3 minutes ago, rott said:

I speak to people who regularly draw on a UK visa card, but are vague about exchange rates and fees. Do they get the bank note rate from the bank whose atm they use, the TT rate or what? And how do the fees work out. Say for an amount of 200 gbp?

 

Visa card holders get the visa rate which is the DCC, Dynamic Currency Conversion rate and it's pretty good, except there's a foreign currency withdrawal charge also.

 

https://en.wikipedia.org/wiki/Dynamic_currency_conversion

 

 

[Pib]

A DCC rate is not the Visa/Mastercard rate...in fact Visa/Mastercard make people aware a DCC rate is set by a local bank/ATM not the card network. A DCC rate is usually around 3 to 4% lower than the card network rate. And a DCC rate should not be confused with the foriegn transaction fee the card issuing bank may apply.

[Chicog]

I believe it reflects the risk of such currencies being unlinked from the dollar and plunging in value overnight. Plus there have been several incidents of "influential businessmen" getting extra printed for their personal use.

 

 

[rott]

56 minutes ago, chiang mai said:

 

You only get one explanation and one apology and you've had them already, if you want to keep pushing the same thing over again we're not going to be friends.

No doubt my fault changers, must have read the post too quickly and missed the apology bit.

 

Overall you seem a decent sort of cove so no harm done.

[chiang mai]

7 minutes ago, Chicog said:

I believe it reflects the risk of such currencies being unlinked from the dollar and plunging in value overnight. Plus there have been several incidents of "influential businessmen" getting extra printed for their personal use.

 

 

 

This is now circular, THB is not linked to USD!

[chiang mai]

26 minutes ago, Pib said:

A DCC rate is not the Visa/Mastercard rate...in fact Visa/Mastercard make people aware a DCC rate is set by a local bank/ATM not the card network. A DCC rate is usually around 3 to 4% lower than the card network rate. And a DCC rate should not be confused with the foriegn transaction fee the card issuing bank may apply.

 

So who sets the DCC rate when I use my UK Barclaycard (visa) in Homepro Thailand and specify payment in Pounds?

 

[Chicog]

4 minutes ago, chiang mai said:

 

This is now circular, THB is not linked to USD!

 

I'm talking about the Arab currencies. They are fixed against the USD.

[SaintLouisBlues]

9 minutes ago, chiang mai said:

So who sets the DCC rate when I use my UK Barclaycard (visa) in Homepro Thailand and specify payment in Pounds?

Lesson #1: Never, ever agree to specifying payment in your home currency when using your credit card in a foreign country. You get the world's worst exchange rate. Only ever use the country's own currency, and your credit card company will convert it at their daily rate which is always better http://www.forbes.com/sites/geoffreymorrison/2014/07/30/pay-in-local-or-home-currency/

[chiang mai]

6 minutes ago, SaintLouisBlues said:

Lesson #1: Never, ever agree to specifying payment in your home currency when using your credit card in a foreign country. You get the world's worst exchange rate. Only ever use the country's own currency, and your credit card company will convert it at their daily rate which is always better http://www.forbes.com/sites/geoffreymorrison/2014/07/30/pay-in-local-or-home-currency/

 

....is the wrong answer!

 

Lesson 2:

 

In the case of UK Barclaycard, doing what you suggest incurs a foreign currency transaction fee which far outstrips any foreign exchange  advantage. Specifying my home currency on the other hand attracts a foreign currency exchange rate that is most favourable. I'll see if I can't print off a statement and demonstrate this to you, later today.

Edited December 3, 2016 by chiang mai

[Pib]

 
So who sets the DCC rate when I use my UK Barclaycard (visa) in Homepro Thailand and specify payment in Pounds?
 

You get the rate as set by the local bank that HomePro uses to process the card transaction. The bank's name such as Bangkok Bank, SCB, etc., will be on the receipt. And the rate will be on the little slip they tear off and don't give you and/or the receipt they give you. My experience with 3 different HomePro stores here in Bangkok is they default to the DCC rate for foriegn cards unless you tell them to charge in baht which I do.

[chiang mai]

2 hours ago, Pib said:

 

You get the rate as set by the local bank that HomePro uses to process the card transaction. The bank's name such as Bangkok Bank, SCB, etc., will be on the receipt. And the rate will be on the little slip they tear off and don't give you and/or the receipt they give you. My experience with 3 different HomePro stores here in Bangkok is they default to the DCC rate for foriegn cards unless you tell them to charge in baht which I do.

 

 

I can go along with that and yes, I think HP does use BB.

 

Last question: you charge a foreign card (which one?) in Baht, do you not incur a foreign currency transaction fee? As said earlier with Barclaycard that fee is prohibitively expensive.

[Pib]

 

Some info from Visa regarding DCC at the bottom of this post....Mastercard has similar info somewhere on their website.   And where it says you are getting the merchant exchange rate, well, it's really the DCC rate established by the local bank the merchant uses to process card transaction.  If doing a cash withdrawal at an ATM the DCC rate is set by the operator of that ATM such as Bangkok Bank, K-Bank, SCB, etc.   Few banks will post their DCC rate as it's of no benefit to the customer since the rate is several percent below the card network (i.e, Visa/Mastercard) exchange rate.  However, SCB does post their DCC rate for credit cards....look in the lower left hand corner of their exchange rate webpage.    About the only thing banks can say that is of benefit to the customer is they will know how much the charge is in the home currency....yea,. they will know and they will also be paying more in their home currency due to the lower DCC exchange rate.  All the real benefits go to the local processing bank, merchant, ATM operator because they make more profit a DCC transaction.   DCC bad for the customer; DCC good for the local processing bank/merchant.

 

Also, depending on your home country card-issuing bank, accepting a DCC transaction can actually end-up causing you to be hit with the lower DCC rate (i.e., usally 3 to 4% lower) PLUS your card-issuing bank's foreign transaction fee which typically runs in the 1 to 3% range.    Now although your home country card-issuing bank was not involved in the DCC currency exchange nor was Visa/Mastercard invovled in the currency conversion...they just passed along the transaction.... if you have an extremely fee-evil card-issuing bank they may still charge their foreign transaction fee (a.k.a., cross border transaction fee) simply because the transaction occurred in another country.

 

So say the DCC rate equated to a 3% fee (i.e., lower rate) and then your card-issuing bank hit you with their foreign transaction fee, say 3%, you have effectively received a 6% lower exchange rate (i.e., indirect fee)  than if using the card network rate simply due to fees by the local processing bank and your card-issuing bank.   Now, it depends on your card-issuing bank whether they still charge you with a foreign transaction fee when the charge in your home country currency hits your account....so, you need to check with your bank.  And the bank may not break-out their fee separately as they just roll it into the total charge hitting your account which causes a lot of people to think Visa/Mastercard has boned them on the exchange rate when in fact it was the local processing bank and/or card issuing bank.

 

Most of the credit and debit cards I use are no foreign transaction fee cards and the debit cards even reimbursement ATM fees.  But my cards are in the minority of cards and the majority of banks and card issuing companies do charge foreign transaction fees and do not reimburse ATM fees.

 

 

Visa DCC Info

http://www.visa.com.sg/travel/currency.shtml

Quote

What is Dynamic Currency Conversion?
Dynamic Currency Conversion (DCC), also referred to as Cardholder Preferred Currency (CPC), is a service offered by merchants – not Visa - in some countries when you are traveling abroad. If you choose to use the DCC service, the merchant will convert the purchase price of goods or services at the point of sale from the currency in which the price (i.e., the merchant’s local currency) is displayed into another currency (i.e. your home currency) using an exchange rate that typically includes a service fee.
 
Here’s an example of a DCC transaction:
A U.S. Visa cardholder is in Singapore and decides to purchase a box of chocolates priced at SGD 20. At checkout, the merchant offers the cardholder the option to pay in USD using a DCC service.
 
The merchant dynamically converts the SGD transaction amount to USD 15.80. The DCC transaction amount and transaction currency (in USD) are disclosed to the cardholder. An exchange rate of 0.79 (1 SGD = .79 USD), which includes a 2.5% mark up (over a wholesale exchange rate) and the 2.5% commission/fee/mark up are also disclosed to the cardholder.
 
The cardholder actively chooses DCC by checking a box on a printed receipt or pushing a button on an electronic screen and agrees to pay USD 15.80 for the box of chocolates using the exchange rate provided by the merchant that includes a 2.5% fee for the DCC service.
 
If you do not want to use DCC when making a purchase, then you have the right to refuse the offer and have your transaction billed in the merchant’s local currency, which will then use Visa’s conversion rate. If you did not agree to DCC, but see it on your bill, then you should ask your issuing bank to contest the charge.