Reading a currency exchange shop’s rate table is a valuable skill that enables you to secure the most favorable exchange rate. This guide will help you comprehend the elements of a rate table and effectively interpret them.
Components of a Currency Exchange Rate Table
1. Currency Pair
The currency pair specifies the two currencies being exchanged. The first currency listed is the base currency, while the second is the quote currency. For instance, in USD/HKD, USD serves as the base currency, and HKD is the quote currency.
2. Buy Rate ("We Buy" or “Shop Buy”)
This rate represents the amount the shop will pay to acquire the base currency from you. For instance, if the buy rate for USD/HKD is 7.75, it implies that the shop will offer you 7.75 HKD for every 1 USD you sell.
3. Sell Rate ("We Sell" or “Shop Sell”)
This rate indicates the cost of purchasing the base currency from the shop. For instance, if the selling rate for USD/HKD is 7.85, it implies that you must pay 7.85 HKD to acquire 1 USD from the shop.
4. Commission/Fees
Some currency exchange shops charge a commission or fee for their services. This may be listed separately on the table or included in the buy/sell rates.
Reading the Table: An Example
|
Currency
|
We Buy or Shop Buy
|
We Sell or Shop Sell
|
|---|---|---|
|
USD
|
7.76
|
7.78
|
|
EUR
|
8.05
|
8.10
|
|
GBP
|
9.68
|
9.78
|
Interpreting the Table
USD/HKD
- We Buy: The shop will buy 1 USD from you for 7.76 HKD.
- We Sell: The shop will sell 1 USD to you for 7.78 HKD.
EUR/HKD
- We Buy: The shop will buy 1 EUR from you for 8.05 HKD.
- We Sell: The shop will sell 1 EUR to you for 8.10 HKD.
GBP/HKD
- We Buy: The shop will buy 1 GBP from you for 9.68 HKD.
- We Sell: The shop will sell 1 GBP to you for 9.78 HKD.
Reading the Chinese Yuan rates
Different currency exchange companies may use vice versa rates when display the rates on their rate board. Below you can see an example:
Some currency exchanges use this:
|
Currency
|
We Buy or Shop Buy
|
We Sell or Shop Sell
|
|---|---|---|
|
CNY
|
1.60
|
1.066
|
The buy rate is 1.06, meaning the shop will give you 1.06 HKD for 1 CNY. The sell rate is 1.066 meaning you need 1.066 HKD to buy 1 CNY.
While some use this:
|
Currency
|
We Buy or Shop Buy
|
We Sell or Shop Sell
|
|---|---|---|
|
CNY
|
0.9434
|
0.9341
|
The buy rate is 0.9434, meaning you need 0.9434 CNY to get 1 HKD. The sell rate is 0.9381, meaning you will get 0.9381 CNY for 1 HKD.
If you have noticed, both the forms of the exchange rates are the same. If you divide 1 by 1.066, you will get 0.9434 and it is same for the sell rate as well.
Tips for Using Currency Exchange Rate Tables with HKD as the Base Currency
- Compare Rates: Check different exchange shops to ensure you get the best rates for your HKD.
- Understand the Spread: The difference between the buy and sell rates indicates the shop’s profit margin.
- Check for Hidden Fees: Be aware of any additional fees that may apply to your transactions.
- Stay Updated: Exchange rates can fluctuate, so ensure you’re working with the most recent rates.
Conclusion
By understanding how to read a currency exchange rate table, you can make more informed decisions and maximize the value of your currency exchanges. Hong Kong Forex Limited hopes that this would have helped you. Keep this guide handy the next time you visit a currency exchange shop to ensure you get the best possible rates.