Why is there a major difference between current exchange rate and my bank exchange rate?
While attempting a international transfer from Qatar to the UK. I checked the online rate according to XE, and was QAR 1 -> 0.2387 GBP. When going online to setup the transfer, the bank was exchanging at QAR 1 -> 0.2301 GBP.
I want to transfer QAR 230,000.
XE rate = 54,901 GBP.
Qatar Bank rate = 52,923 GBP.
That a little over two thousand pounds I'm losing in the process. This goes far beyond any fees they may charge. I understand that some banks set the rate at the start of the day, but I checked that too and there is still a large discrepancy.
Is there a rational reason for this or am I being ripped off?
Is there a better/cheaper way of sending money that reflects a better exchange rate?
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Yeah, the rational reason is that some people pay it. Anyone who does regularly exchange money at a bank either does not use the bank OR talks to the bank and sets up different rates. I.e. I can excahnge Euro to PLN in my polish bank with a negotiated rate through the Forex desk, minimum 10k euro at a time. All it took was talking to them - and doing so regularly (which I do, as my business has euro only income).
I've traded many currencies, but never that one specifically, so if someone wanders along who has, then their advice will certainly supersede what I'm about to tell you.
Welcome to the wonderful world of currencies.
3-4% doesn't surprise me.
That's not a terribly liquid cross. Which means you pay more as a percentage. You're not trading terribly large size, which means you actually pay more as a percentage because there's a fixed cost involved on their side of the trade.
If you want a better rate call them and speak to the people involved. Let them know that you know where the market is because if you don't you'll get the absolute worst rates, which is what you're seeing.
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