Make the most of forex rates

It's the busiest time of the year at airports around the country. Make sure you know exactly what to carry and what to do.

It's the busiest time of the year at airports around the country. Make sure you know exactly what to carry and what to do.

Published Dec 14, 2011

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South African tourists who got “locked in” foreign exchange rates up to six months ago, are smiling, says Alan Salomon, the managing director of Bidvest Bank, the country’s largest providers of foreign bank notes and international currency cards.

Bidvest Bank alerted customers months ago to a little-publicised relaxation of exchange controls that permitted South Africans to book foreign exchange up to six months before departure for an overseas business trip or holiday.

In mid-year, the strong rand was holding up well against the dollar and many other currencies, creating opportunities for forward-looking holiday planners who were in a position to make use of a Reserve Bank-approved currency hedging contract.

“Back in June, the rand was trading at R6.80 to the US dollar,” says Salomon. “At the time, some observers felt it would weaken later – and it has. In recent months, we’ve seen the rand strengthen slightly to the greenback to R8, still representing a rand depreciation of 18 percent over five months.

“Obviously, those who used our forward lock-in service have enjoyed a lot more holiday peace of mind and more hard currency to spend on holiday than those who decided to risk it.”

Salomon says Bidvest Bank experienced slow uptake of the new service, despite proactive marketing. Given renewed bouts of rand weakness, he expects the penny to drop in the months to come with those planning overseas holidays or further foreign payments.

What about holiday-makers who lost out on the lock-in service? Are there any smart options left that might save them money? Says Salomon: “Load your holiday money into a world currency card denominated in the currency of your destination. It’s pre-loaded so you don’t have sleepless nights about sudden rand weakness.” - Saturday Star

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