When it comes to making international money transfers, Brexit is posing a big headache for a lot of people.
Not only are exchange rates so low that businesspeople are feeling the pinch, but there’s also a lot of uncertainty around – meaning that it’s challenging to decide what to do. This article will explore these problems, and offer some advice on how to mitigate the problem.
Low exchange rates
The main problem involved in moving money out of pound sterling and into another major currency, such as the dollar or the euro, is that the pound is weak at the moment. That means that you won’t get nearly as much value for money as you would have done a year or even a month ago. If you’re going on holiday, that might be a small inconvenience. But, if you’re an exporter or you have a major commercial interest abroad, it could be a life-changing sum of money. Selling a property in France and turn it into pounds, for example, could see several percentage points of value wiped out due to the pound’s performance. This calls for saving cash wherever you can: using an online comparison tool to find the best deal for your chosen destination is a good idea. Saving a percentage point in fees might not entirely make up for the losses that a historically low pound is placing on you, but it’s still worth a try.
Economic and political uncertainty
Another option available to you if you have an upcoming international money transfer to make is to consider delaying it until things are a little clearer. With Boris Johnson’s working majority now as low as one, it’s clear that a general election – another event of market-moving proportions – is also a definite possibility. And some people are predicting a showdown between the parties during the autumn. But other analysts believe that Johnson may be bluffing by threatening no deal – and that a deal could well be struck in time. It feels a little like catch-22: make the transfer and take the hit or wait it out and risk it becoming worse. Some businesses can’t wait to make significant decisions which involve liquidating assets and converting them into pounds. But whether you can wait or not, it may be worth using the time between now and placing the transaction, to find the most cost-effective fee structure to save wherever you possibly can.
Money transfers are a fact of life – and if you may find that you have to go ahead right now and absorb the cost. If you can afford to wait, don’t forget to use the time saved wisely to plan your big transaction and ensure that you get the most cost-effective deal possible.
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