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Understanding Exchange Rates

HomeResourcesUnderstanding Exchange Rates

UNDERSTANDING EXCHANGE RATES

Understanding exchange rates

After years of waiting for the Iraqi economy to improve, millions of Americans are now ready to sell their Dinar and put that money to work elsewhere.
Many individual investors have been holding IQD banknotes, hoping to cash out at the best possible exchange rate.
They’re seeking better alternatives to the expensive traditional dealers who offer very low buy-back prices.
When selling Dinar or any other foreign currency, you’ll need the right information about exchange rates in order to get the best price for your banknotes.

New, fair pricing

Here’s good news – Unlike traditional dealers, Currency Return buys Iraqi Dinar, Vietnamese Dong, Indonesian Rupiah and other foreign currency banknotes from retail sellers at fair prices.

Smart consumers are beginning to discover the benefits of using Currency Return to sell stagnant currency investments at competitive market prices.

This means currency owners can avoid being “skinned twice” by the same ruthless dealers who first oversold the Dinar.

The basics about foreign currency exchange rates

There’s plenty of confusion about which exchange rate is actually available to small investors who cash in their IQD.

If you’re thinking about selling Dinar or other currency, first you’ll need to understand foreign currency exchange rates, and who receives which type.

Foreign exchange rates are like interest rates in the sense that a small change in rate can make a big difference in the cash-out amount you actually receive.

So in order to make realistic calculations and get the most cash when selling, let’s take a careful look at exchange rates.

What is an exchange rate?

In banking and finance, a foreign exchange rate (sometimes simply called an exchange rate or FX rate) is the amount of currency or the rate at which any given currency can be traded for another.

For example, if USD $1 will buy IQD 1165 then the exchange rate is said to be 1165 Dinar for each Dollar.

Likewise, the price of 1 Dollar is 1165 Dinar.

Liquid and non-liquid currency markets

Worldwide, foreign currency transactions total about USD $5.3 trillion each day.

Still, it’s important to keep in mind that nearly all currency exchange is conducted in leading currencies.

Major currencies such as the Dollar, Euro and Yen have very liquid markets – They’re easy to buy and sell with minimal “spreads.”

On the other hand, the Dinar, Dong and other non-liquid currencies are almost never traded by any bank or institutional investor.

Instead, predatory dealers have hyped and oversold these currencies to ordinary Americans.

Different types of exchange rates

Foreign currency rates are always determined by the aggregate decisions of large buyers and sellers in the foreign exchange marketplace, where trading continues 24 hours a day.

Participants in the marketplace receive different exchange rates (currency prices) according to their level of participation.

The forward exchange rate is the price at which a pair of currencies are traded and quoted today, yet with delivery and payment agreed for a specific date in the future.

This rate is generally used by manufacturers, importers and exporters who need to “hedge” their  foreign currency risks in order to protect supply agreements.

And, the interbank exchange rate is the price of currencies traded between the largest banks and financial institutions.

The interbank rate is only available to financial giants willing to park large amounts of foreign currencies overnight in money markets.

Retail currency exchange rates

In contrast, most American Dinar investors are ordinary folks with limited assets.

They typically own Iraqi banknotes worth anywhere between several hundred to several thousand dollars.

When it’s time to sell these small, individual owners typically receive retail currency exchange rates.

From the perspective of our Dollar-based banking system, the retail buying rate is the price at which dealers will buy relatively small amounts of Dinar banknotes from individual owners.

Likewise, the retail selling rate is the price at which dealers sell currency to their customers.

Obviously, the difference between buying and selling rates is the dealer’s margin or gross profit.

For years a cartel of four US dealers squeezed retail buyers and sellers alike with enormous price spreads and profit margins.

If you’re a Dinar owner here in America, the retail buying rate is what you’ll receive when you sell your holdings.

The alternative to high-priced traditional dealers

Dinar owners forced to sell are often angry with the high-priced traditional dealers who promoted this low-valued currency in the first place.

They’ve watched the Dinar RV dream disappear along with those big dealers arrested by the feds.

Fortunately there’s an easy way to sell your currency for the highest price – Currency Return.

We’ll buy your foreign currency at a fair market price, then we’ll sell it into the commercial export market.

That way it’s returned to the country of origin, which is where it belongs.

Return currency now

Remember we can return your currency regardless of where you purchased it!
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