exchanging other currencies into rmb

[yonitabonita]

Hi folks

Anyone know whether the banks charge a commission for converting other currencies into rmb?

I've just come back to Beijing from Australia and have brought some cash over with me. A friend of a friend of a friend wants it at the bank's daily rate. I can't see any great advantage in this transaction from my side it unless I'm saving on a commission.

Any advice?

Thanks in advance.

Y

[889]

Banks have two daily rates for cash exchange: one for selling RMB to customers and one for buying it.

Presumably your friend's friend wants to use the bank rate for selling RMB to customers; fairer would be to use the mid-point between the two rates. But you may well not want to get into this business at all, since it does involve risks and the benefit is small: it's not legal, you may get counterfeit bills, and quick-change sleight-of-hand does occur.

(Further, your friend's friend probably doesn't have the paperwork needed to buy foreign exchange at the bank rate and would otherwise use the black market, so using the mid-point between the two bank rates is not really splitting the difference in any event.)

[jbiesnecker]

I'd just exchange it at the bank if I were you. It's not a huge charge, and it avoids the problems that 889 pointed out.

You're doing the guy a favor by trading your much easier to convert foreign currency for his difficult to convert RMB, he should give you some benefits for that, me thinks. I don't see why you should accept anything less than the selling rate for AUD (looks like about 628 RMB/100 AUD, if I'm reading the chart right). That's what he'd get at the bank, and if he doesn't have the paperwork for that then he should take what he can get (or go to the professional black market guys). Otherwise you take all the risk for nothing.

[yonitabonita]

Thanks for the great advice folks.

I'm off to the bank!

[roddy]

Don't forget though that by changing the money for the friend of a friend, you can yourself charge commission to the value of 'one favor'.

[cdn_in_bj]

If you're not planning to go back to Australia in the near future and therefore don't have a use for your leftover AUD, then I don't think it's such a bad idea. But I'd take 889's suggestion and use the average of the bank's buy and sell rate to be fair to both parties. This is assuming we're dealing with a modest amount, say, a few hundred AUD (anything larger and I agree it becomes more risky).

Here are suggestions for you to reduce your risk if you choose to go this route:

Have this friend of a friend of a friend go with you to an ATM and withdrawal the cash. Your chances of receiving fake bills are minimal.

Or, go to an ATM but instead of withdrawing cash have the friend transfer the money directly to your account. This only works if 1) you have a Chinese bank account and 2) the friend has an account at the same bank.

On the flipside, unless we are talking about a large amount of money, this friend of a friend of a friend shouldn't have problems buying AUD at the bank. So this proposed transaction is really just to give both parties a better deal. You've gotta decide if the 1.5-2% saved is worth the time and hassle.

[yonitabonita]

[

Don't forget though that by changing the money for the friend of a friend, you can yourself charge commission to the value of 'one favor'.

Cashing in on that 'one favour' had crossed my mind. My 'friend' is in fact my landlord.

The friend of a friend is offering to electronically wire it into my account, so counterfeit isn't an issue.

Still, I'm a bit annoyed that it was just assumed that the selling rate would apply and not the buying rate, or an average between the two. Do you think it would be really offensive to my landlord if I were to point out the obvious unfairness politely?

The amount in question isn't left over money. It's 2,000 bucks, so in my books, worth at least a post for some further perspectives.

thanks for your thoughts guys. Really appreciate it. After two weeks of the Australian autumn, I'm not in my China headspace yet.

y

[889]

Forget, for a second, that you're a foreigner in China and imagine instead that you're a returning Chinese student with a pile of dollars in hand. What'll be the exchange rate when friends of friends come calling?

Remember that in China, there's nothing shameful about insisting on a fair bargain.

And then some . . . .

[cdn_in_bj]

Still, I'm a bit annoyed that it was just assumed that the selling rate would apply and not the buying rate, or an average between the two. Do you think it would be really offensive to my landlord if I were to point out the obvious unfairness politely?

I see. It does complicate your situation that he also happens to be your landlord, but somehow I'm not surprised he'd do that. I'm pretty sure he knows there are different rates for buying and selling, but maybe the least offensive way would be for you to not point out the obvious (ie- that he's taking advantage of you), but instead act ignorant and just tell him something along the lines of "I'd be glad to help out your friend. In fact, I just called the bank to check the exchange rate and I found out there's different rates for buying and selling - why don't we use the average of the two, that way we both benefit". He probably won't be happy to hear that but I don't see how he can disagree without making himself look like a real prick.

Remember, you only need save your dignity while he needs to save face.

If you're worried this tactic may backfire (and I'm only suggesting this because he's your landlord, if he were just a regular acquaintance, I'd say, screw him), then just suck it up and go with the buying rate (afterall you aren't losing anything) or you could make up some story about not wanting to change the money back into RMB, but the latter could lead to some other complications...

thanks for your thoughts guys. Really appreciate it. After two weeks of the Australian autumn, I'm not in my China headspace yet.

I had to think twice after reading "autumn". Sounds like a fun trip.