hello, I recently purchased some RMB for investment purposes and I got an exchange rate of 6.3 to 1 USD. The normal exchange rate for RMB is around 7 to 1. I'm wondering if this hefty premium is normal or not. Does anyone have any experience of buying RMB, and if so what was the exchange rate? Any info is appreciated. thanks.
where did you exchange it, like an airport or one of those small "currancy converter" shops in a city? I've seen spreads in those type of places to be really bad so its not that uncommon. Also, what are you doing with the paper money? putting it in a safety dep. box for the long term? You havent looked into (1)buying futures, or (2) opening an actual banking account (maybe www.everbank.com). Then you can at least earn interest, buy CDs, ect...
Based on current market trends it will take you more than a year or so to get back to break even. Not a good price for your yuan.
everbank doesnt pay any interest on the yuan cd. oanda uses forwards and they tend to price in future appreciation which is reflected on the high interest cost to carry a short USD/CYN it seems the right way to do this is to go to china and open a bank account
WHAT? 6.3? That's absurd! Where did you do the exchange? The rate is around 7.02-03 as of today At a local shop you can expect anywhere from 7.0-7.03 but not anywhere close to 6.3. If someone tries to sell me yuan today at 6.3 I'd take the money, buy a ticket to shanghai and get it done there. 70 cent spread? No way. Please tell where you did the exchange.
You got ripped off. Current rate is 7.0112 (sell USD/buy RMB) http://www.banking.hsbc.com.cn/cn/general/fxrates/general_fxrates_en.htm
hey, thanks for the replies. I bought the RMB at a currency converter place. I had a feeling I was being ripped off. oh well, I only bought a little bit. my plans are to hold physical possession of the fiat money and wait patiently for the revaluation to take place. the reason I don't want to go to everbank is I'm concerned if and when the revaluation takes place everbank will be bankrupt. I do wish I could get interest on my money though especially with the inflation in china. does anyone have any experience of actually going to china and opening a bank account? are foreigners allowed to open bank accounts with no restrictions?
do a search on this forum...there actually was a topic about that. I believe people said it was fairly easy to open them while on vacation, and they had internet banking. Yea those currency converter places can be a real rip off depending on how much money your trying to convert. I know a guy thats going to Italy next week and he needed to exchange a small sum of dollars to euros and he ran into the same problem - got a terrible rate plus was hit with major fees ect...
Hey Fullblotter, That's actually a pretty crappy price but I'm guessing you already know this. Going to Shanghai or Guangzhou in China is probably your best bet to open an account with an U.S. or international institution. There are alot of choices since most of the international banks have representative offices there. I opened an acct with Citibank Shanghai branch and basically you need your passport and fill out the appropriate paperworks. They give you a grace period of 90 days I think it was whereby you can open the account there and then when you go back home, wire the funds into the said acct. After that, internet and phone banking can be done. This is a pretty good route since you get the RMB conversion, plus options of savings acct, 6 months is going for around 3.14% at the moment. Hope this helps,