International currency exchange rates never remain same but always fluctuating. This constant change leaves many frustrated. Understanding international exchange rates is an important part of running a business with operations in different countries. Here is the truth about currency exchange rates and fees.

What affects exchange rates?

Several things, such as the strength of the economy, serious political events, natural disasters, can all affect a country’s currency. The interest rate paid by the country’s central bank significantly contributes to how much in demand their currency is. If the interest rate is higher, the currency becomes more valuable.

When a currency is considered more valuable, investors exchange the currency they are holding for the higher one. The country’s central bank would then hold onto the exchanged currency, to eventually receive a higher interest rate.

Any economic growth, or its lack, can also strongly impact the currency’s exchange rate. If the country isn’t showing stability, investors will be less willing to invest in its currency.

Myth – There are different exchange rates

The idea that there are many different exchange rates, is not true.

It’s true that if you call your bank and your local change shop, you’ll probably get different amounts.

But the fact is that there is only one, true currency exchange rate – the mid-market rate or inter-bank rate. This rate is the midpoint between supply and demand for a specific currency in the global markets. At any given time, there is only one mid-market rate. But then there are commissions and fees.

Myth – 0% commission

When exchanging currency, the first thing you probably think of is the fee. Many currency exchangers may promise you “0% commissions” or “no fees”. That’s far from true.

Usually, the provider will calculate their fees such that it is included as part of the exchange. This makes it appear that there is no fee.

So, if you’re transferring money from one currency to another, work with a currency exchange service that doesn’t hide its exchange fees.

There will always be fees for any service, but the reputed currency exchange providers try to ensure that the customer gets as much of the exchanged currency as possible. If you come across a currency exchange service, claiming to have zero fee or commission, ask them about the real fee the next time.

If you are looking for the best buy and sell foreign currency exchange rate in Florida, call Florida Currency Exchange at 813-280-9999. At Florida currency exchange service, we offer you the best exchange rates in the area and if you find a lower rate within 100 miles of their locations, we will match it!