Rates and rates

Press, 29 June 1985, Page 23

Rates and rates

There’s more to foreign exchange rates than meets the eye, as one Christchurch importer discovered this week. The importer was concerned to see the New Zealand dollar rate quoted in “The Press" at SUS 0.4725/ 32. He had, he said,, received only JU50.4665 the same afternoon, and wondered why there was a difference. The foreign exchange manager of a trading bank in Wellington explained that the importer would have received a lower rate than that quoted in “The Press” for two possible reasons. The rate can rise or fall

several times during the day and, depending on what time of the day foreign currency was exchanged, the rate could differ from the late quote printed. The rate quoted was the inter-bank exchange rate. Public rates are set about 50 points below this, giving banks a commission of about 1 per cent for handling the deal. The commission can vary, however, as concessions can be given to customers depending on factors such as the size of the parcel being exchanged; the amount of business the customer does with the exchange dealer, particularly if it is a bank, and therefore what return the customer provides to the bank on regular business. Public rates apply to parcels of money ranging from $1 to §20,000. Concessions most often apply to parcels measured in millions of dollars, though exceptions do occur, depending on the customer’s relationship with the dealer.?!