Are you thinking about a vacation overseas or returning from one? An international trip for your personal or business depends heavily on foreign exchange. And it means an accurate currency conversion for the destination country. In India, different foreign exchange sources can assist with the transaction. These include airport counters, commercial banks, money merchants, and online platforms.
Foreign exchange is one of the widely discussed topics as it is an integral part of international travel. This process includes purchasing the currency of the destination country with the value of the Indian rupee. For example, if you’re travelling to the US, you will need to purchase the currency in US dollars for your trip according to the current exchange rate in India.
But it can be a costly and drawn-out process. So how should you go about the foreign exchange process in India? We have compiled everything you need to know about it.
What is the definition of foreign exchange?
Foreign exchange is the practice of exchanging one country’s currency for the money of the other country. It is frequently referred to as forex as well. And the rate at which the market changes one currency into another is known as an exchange rate.
The currency exchange takes place in a global currency market, which includes swapping euro, dollar, yen, or pound depending on the country you’ve decided to travel to. The transactions are buying, selling, and exchanging these currencies with the exchange rate at that moment. The process is done through your local bank or an airport.
There are two forms of foreign exchange. These include buying and selling foreign exchange or foreign currency.
To buy forex – If you require the currency of the destination country for your expenses, you need to buy the foreign currency. It could mean exchanging the Indian rupee with US dollars, yen, or euros depending on the country you’re travelling to for your personal or business trip.
To sell forex – After you get back to India, you might have leftover foreign currency at hand. Before it becomes invalid, you have to sell it for the Indian rupee as soon as you return from your international travel.
How can you exchange money in India?
The currency exchange can be done through several methods in India. These include local banks, airport counters, online platforms, and money merchants. But which of these is the best option for foreign exchange? Do they have pros and cons? Let us find out!
Commercial banks – Major banks in your area can help facilitate your need for foreign exchange. And you can take the currency to the bank you have an account in, whether it is ICICI or HDFC. The credibility of these banks helps avoid money-related fraud. However, the exchange rates offered by these banks are almost always high, which could make it an expensive process to convert your money. Foreign exchange is an additional service for these banks, so they don’t engage in it other than to make profits.
RBI-approved money merchants – For foreign exchange, you can also seek the help of money vendors or money merchants. They are available in most major cities and small towns to provide these services. Compared to the banks, their exchange rates are far more reasonable as they actively engage in foreign exchange. But you need to ensure that they are authorized dealers before you use their services.
Airport counters – If you are running out of time, there are separate counters at the airports designated for foreign exchange or forex. It is usually the last option you must consider while travelling to another country. Their exchange rates are incredibly high, and you might have to pay a lot more than you would have by any other means of currency exchange. This option is best used only during urgency while travelling abroad.
Online platforms – The best way to buy, sell and exchange money is with the help of online services. These are the most trusted source for currency conversion as there are no hidden charges, and there is complete transparency of the transaction. Their exchange rates are the best in the market, and they help make the process hassle-free. You can enjoy fast and round-the-clock services without stepping out of your home or office.
Top factors that influence currency exchange rates
The prevailing exchange rate plays a role in the global market. It determines the value of any foreign currency based on factors that could be political or trade-related. But there could be several other factors that decide the value.
The political state of the country impacts exchange rates. A stable political situation helps the currency, while instability leads to devaluation.
The inflation rate affects the value of the currency. It means that different countries have varying values of currency. A country with low inflation can have higher currency value, enhancing the purchasing power of its citizens.
Business trading between two countries has an impact on the exchange rate. If exporting goods is higher than importing them, the rising demand from the home country leads to better exchange rate conditions.
The banks also influence the process by changing interest rates. A higher interest rate causes the exchange rates to go up and vice versa.
What are the documents required for money exchange?
Before you decide to seek foreign exchange services, you must know about the documents you must have at hand. Usually, RBI-approved money changers and banks ask for these documents.
- Aadhar card
- PAN Card
- Voters ID
- Driving license
- Confirmed tickets
Online platforms are the best source for foreign exchange or forex. Prune is a one-stop destination that offers the most reliable and fast process in the market. From low exchange rates to doorstep delivery, here are the benefits of the Prune app and website.
Easy online service – You can book a foreign exchange service from the comfort of your home or office. Prune app and website make the process easier for you with a complete online transaction that saves time and effort.
Competitive exchange rates – Prune gives you the best exchange rate available out of all the sources of foreign exchange. And you can even track the live exchange rates before you buy/ sell foreign currency.
Fast delivery – Get the currency delivered to your home in just two to three days. The round-the-clock services make the transaction a smooth experience.
Better rate request feature: If you’re not satisfied with the exchange rate offered to you, the better rate request feature helps you raise a request for the current best deal in no time.
Prune also offers several other high-quality services. You can buy a SIM, pay for utility bills, discover travel experiences, and compare the latest smartphones – all on a single platform.
Download Prune now!
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