Jump to content

The tumultuous Rand


moerbei

Recommended Posts

Hi,

Any idea when we should exchange or if we should exchange all our money now. Spoke to Tanya from FX she was very helpful but from what I understand the money is invested here for 5% interest rate via Investec and transferred when you need it. Just worried about this as I thought the money would have been invested in AUD and not ZAR.

I hate taking a gamble so not sure what route to go: transfer all or only when we need it?

  • Like 1
Link to comment
Share on other sites

PARKS,

Im not money exchange expert mate, but if it were my bucks, i would move it. Your interest rate in SA is just a little higher than Aus, but the main issue is the rand depreciation. It is dropping faster than the difference in interest, and if you offset CPI/inflation you have a nett negative situation in SA in real terms. In any event, once it's here it can sweat in a nice little high interest bearing account. :ilikeit:

Link to comment
Share on other sites

I am no financial guru and I may give wrong advice. But from 2 year experience (bringing the last of our money over now - final tax rebate), we got the best deal when we exchanged immediately two years ago at R8.20. If you don't need money in RSA, just bring it over. It's also draining to try and predict the market and constantly worrying over when you'll get the best deal.

Ultimately we just decided we'll take the knock and bring it all over, and it was by far the best decision ever. You may end up in an emergency here, need the money and be forced to exchange when the rand is taking a serious beating.

Link to comment
Share on other sites

Surferman and Heidim,

Thats the way we were leaning, just needed to hear your thoughts. Would our bank do the transfer of all our monies to our Commonwealth account? If so, then why the need to use one of the foreign exchange agents mentioned on the forum?

Link to comment
Share on other sites

The bank charges a fee and offers a certain exchange rate. Which is more than what the exchange agencies charges. So you end up with more money in your account in Aus at the end of your transaction with the agency. But because they are cheaper, they have a minimum amount that you have to transfer and it can take day or two longer than the bank.

  • Like 1
Link to comment
Share on other sites

Surferman and Heidim,

Thats the way we were leaning, just needed to hear your thoughts. Would our bank do the transfer of all our monies to our Commonwealth account? If so, then why the need to use one of the foreign exchange agents mentioned on the forum?

Hi PARKS

Exchange4free is one of the mentioned forex agents :)

Just like Eyebrow explains it is definitely easier and cheaper to use our services. Registering and transfer of funds can all be done online, we then send a courier to collect your documents. We offer great exchange rates and do not charge transfer fees or commissions. As we are a registered and regulated agency, only as soon as all the necessary documents are received can we begin the transfers.

Please let me know if you need any assistance.

Thanks Tara

Link to comment
Share on other sites

  • 2 weeks later...
  • 2 months later...

Just for those looking at transfering some funds. Now appears to be a much better time than a few months ago.

Online currency calculator this morning R9.126 vs AUD

http://www.x-rates.com/calculator/

  • Like 1
Link to comment
Share on other sites

Cant believe how the A$ has dived in the last four days. From around R9.56 to R9.08 a few minutes ago. Just done a transfer :rolleyes:

Link to comment
Share on other sites

And the A$ will get lower...predicted to get down to 75 cents. Why?

Yesterday’s announcement by the European Central Bank that it was to launch a 60-billion Euros a month Quantative Easing programme caused the Euro to immediately lose some 1.5 percent of its value relative to most other world currencies. The euro plunged after the ECB launched a scheme to buy 60 billion euros ($A86 billion) worth of private and public sector bonds per month between March 2015 and September 2016. That sent the greenback (USD) skyrocketing, weighing on the Australian dollar. A more dramatic move below 80 US cents will probably happen in the next couple of weeks, with official inflation figures to be released on Wednesday and the Reserve Bank's interest rate decision the following week.

Thus the Rand has been loosing value relative to most world currencies for some time now, it has actually been GAINING relative to the Euro. This will effectively strengthen the Rand (A falling graph denotes a strengthening currency because fewer Rands are needed to buy Euros) So how far can it go? ...........based on Fourier analysis (RCIS Investment Services Jan 2015) of past and most recent performance see below but many things can happen in between.

As the whole world is competing to lower the value of their respective currencies in order to stimulate trade which might, in turn, get their idle factories back to work and jobs for their ever-growing armies of unemployed…. and because the great US monetary experiment (US Quantative Easing) could shortly begin a melt-down. In a world as economically fragile as it is at present, the fall out may follow and could be significant. That is why investors run for cover. All of that money only serves to drive down the value of money (and debt) which in direct consequence drives up the value of hedge assets like Blue Chip shares. Again massive opportunities!!!!

Link to comment
Share on other sites

My advice: move it now. Don't wait for something better. The sooner you get your money out, the sooner it starts growing at the higher rates.

When we planned our move, the rate was 3 to 1, by the time we got here, it was 5 to 1. When we eventually got our money out, it was 8 to 1.

It's not going to get any better. Cut your losses and move it.

  • Like 1
Link to comment
Share on other sites

When a currency has an inflation rate in double figures, and another currency baring having any inflation at all, the economic circumstances dictate that over time, the high inflation currency will lose value in wages and prices compared to the low inflation currency.

So . . . . . a currency with high inflation (Rand, Uganda Shilling, etc) will fall behind eventually compared to low inflation currencies (Swiss Franc, Euro, Australian $, and so on)

Given time, the high inflation currencies will be worth less and less compared to the low inflation "hard" currencies (Swiss Franc, Aust $)

The graph of each day's worth may wobble up and down, but looking at the long term trend (5 years, 10 years) the graph is always the same. . . . . downwards.

You need to determine when is the best day of the week or month to exchange and accept that. Waiting longer could be more costly.

Nobody can advise you the best day of the month. It really is your call.

I switch $20 000 each year into Pounds Sterling.

I use a foreign exchange called "Forex".

They give me a far better exchange rate for my Australian dollars than the banks do, and I also pay no fees.

Last year I got 11 500 Pounds for my $20 000.

Going thro the banks, I would only get 11 300 Pounds, and then pay 1.1% in switching fees (losing another 113 Pounds), so my total would be 11 187 Pounds, instead of 11 500.

Which do you reckon is the best way to go in exchanging large amounts of money?

A foreign exchange company??? . . . . . or the bank down your High Street?????

Link to comment
Share on other sites

  • 4 weeks later...

From a long term perspective over past 5 years:

From short term perspective - 120 days from 12 March 2015:

Link to comment
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

×
×
  • Create New...