Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Kiwis moving abroad lose millions on exchange

Kiwis moving abroad lose millions on foreign exchange transactions

Auckland, 11 December 2006 – New Zealanders leaving the country are potentially wasting millions of dollars annually when they change their Kiwi dollars into another currency, according to leading independent foreign exchange risk management company HiFX.

HiFX Managing Director, New Zealander Brett Finnigan said Kiwis leaving either permanently or to take up lucrative long-term work contracts abroad could be losing up to $55 million per year through poor foreign exchange rates and associated bank charges.

Almost 73,000 New Zealand residents departed the country in 2005*, some of them to settle permanently abroad, but many also to take up high-paid jobs in places such as the United Kingdom, Australia, China, Hong Kong, Dubai and Singapore.

“Moving to a different country is a significant upheaval. At some stage in the relocation process you will need to convert some or all of your savings, such as the proceeds from the sale of your house, into the local currency of your new country,” said Mr Finnigan.

“Your future wealth will be affected by the exchange rate you receive when you purchase your currency requirement. Effectively there is a right time and a wrong time to transact a currency exchange as the currency market is volatile.

“For instance, if you are leaving New Zealand to settle elsewhere, if the Kiwi dollar strengthens between the time your visa is granted and you physically move, you will receive more of your new currency which means that you will be able to buy more with your money. Conversely, if the Kiwi dollar weakens, you will have less buying power,” he explained.

Mr Finnigan added that people are often unaware of the risks associated with changing money or indeed the range of alternative service providers that exist in New Zealand outside the big five banks.

He said individuals and families could benefit from a professional and planned strategy for moving money across currency borders, but unfortunately, the vast majority have no idea such services are available to the public.

“Having access to experts who take the time to fully understand your currency requirements and exposure, and guide you through the process, is obviously valuable to make the currency aspect of your relocation as simple and as cost effective as possible, while at the same time minimising your currency risk,” he said.

Mr Finnigan said HiFX runs a Regular Payment Abroad service (RPA) to enable Kiwis living abroad or travelling abroad for long periods of time to manage their regular payment obligations, such as mortgage payments, effectively.

HiFX does not charge its customers to send money back from overseas through their regular payments service and also eliminates receiving bank charges. The service also protects people against currency fluctuations, by fixing exchange rates for between six and 24 months.

“HiFX’s regular payment service means you no longer have to pay expensive bank charges when making regular payments from overseas. The service also means you have certainty of sending the same amount every month, without worrying about currency fluctuations. HiFX arranges everything on your behalf and it is all done via direct debit, meaning you don’t have to speak to your foreign or usual bank each month,” Mr Finnigan said.

Another method HiFX offers private clients to minimise their currency risk is an exchange rate guarantee (ERG) that protects individuals against adverse currency movements when transferring funds internationally.

“With an ERG, you secure the right, but not the obligation, to buy your currency at a pre-agreed exchange rate for a future date.

“You fix the future-dated currency rate now by paying an upfront premium similar to an insurance premium. On the date of maturity you then decide whether to proceed with the pre-agreed rate or go with the prevailing market rate, if it is more favourable.

“If the prevailing market rate is worse, you simply exercise the contract for the rate guaranteed. If it is better, you can let your exchange rate guarantee lapse and transact at the prevailing market level,” he concluded.


* Statistics New Zealand Hot of the Press External Migration 2005 year, 21 February 2006.

ENDS

About HiFX:

HiFX is a global leader in foreign exchange risk management and cash deposit services. Established in the United Kingdom in 1997, HiFX has operations across Europe, North America and Australasia, including Sydney and Auckland.

HiFX is highly regarded for its expertise in protecting private individuals and companies against foreign exchange risk and for enhancing liquidity on surplus cash deposits, offering its clients a proactive risk management service.

HiFX’s service is a non-fee based service. No commission or bank charges are incurred when completing a currency transaction via HiFX. Instead, HiFX aims to add value through optimising the timing of transactions and by providing a better exchange rate than the banks.

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

I Sing The Highway Electric: Charge Net NZ To Connect New Zealand

BMW is turning Middle Earth electric after today announcing a substantial contribution to the charging network Charge Net NZ. This landmark partnership will enable Kiwis to drive their electric vehicles (EVs) right across New Zealand through the installation of a fast charging highway stretching from Kaitaia to Invercargill. More>>

ALSO:

Watch This Space: Mahia Rocket Lab Launch Site Officially Opened

Economic Development Minster Steven Joyce today opened New Zealand’s first orbital launch site, Rocket Lab Launch Complex 1, on the Mahia Peninsula on the North Island’s east coast. More>>

Earlier:

Marketing Rocks!
Ig Nobel Award Winners Assess The Personality Of Rocks

A Massey University marketing lecturer has received the 2016 Ig Nobel Prize for economics for a research project that asked university students to describe the “brand personalities” of three rocks. More>>

ALSO:

Nurofen Promotion: Reckitt Benckiser To Plead Guilty To Misleading Ads

Reckitt Benckiser (New Zealand) intends to plead guilty to charges of misleading consumers over the way it promoted a range of Nurofen products, the Commerce Commission says. More>>

ALSO:

Half A Billion Accounts, Including Xtra: Yahoo Confirms Huge Data Breach

The account information may have included names, email addresses, telephone numbers, dates of birth, hashed passwords (the vast majority with bcrypt) and, in some cases, encrypted or unencrypted security questions and answers. More>>

ALSO:

Rural Branches: Westpac To Close 19 Branches, ANZ Looks At 7

Westpac confirms it will close nineteen branches across the country; ANZ closes its Ngaruawahia branch and is consulting on plans to close six more branches; The bank workers union says many of its members are nervous about their futures and asking ... More>>

Interest Rates: RBNZ's Wheeler Keeps OCR At 2%

Reserve Bank governor Graeme Wheeler kept the official cash rate at 2 percent and said more easing will be needed to get inflation back within the target band. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news