Sunday, February 20, 2011

How to read buying & selling price in money changer counter?

Have you ever confused with currency exchange especially when you want to buy certain country’s currency in the money changer counter before you travel? Should you aim for lower or higher price?

There are only 4 things you should able to see from money changer counter: Date, Unit, Currency, Buying and Selling prices.  Here is the example:

Date: 20/02/2011
Unit Currency We Buy We Sell
1 US Dollar 3.015 3.035
1 Great Britain Pound 4.880 4.935
100 Chinese RMB 46.000 46.650
1000 Japanese Yen 36.250 36.700

Before you go into this, the first thing you need to know is the base currency. The base currency should be the currency based on the country where you exchange your money. For example, if you go to the money changer in Malaysia, the base currency will be in MYR – Malaysia Ringgit. If you exchange your money in China, then the base currency will be based on the Chinese RMB then.

The table above is an example that you can see from the money changer in Malaysia (the base currency is MYR). The table tells you that you need RM3.035 to exchange with 1 US dollar and RM46.650 to exchange with 100 Chinese RMB. Look at the “We Sell” column whenever you want to buy and look at the “We Buy” column whenever you want to sell.  The formula is very easy:

You want to buy foreign currency with MYR, this is how much you should get:
Money that you want to exchange in base currency(MYR) / We Sell (Buying Price) X Unit
You want to sell foreign currency and get back the MYR, this is how much you should get:
Money that you want to exchange in target currency(Foreign $) X We Buy (Selling Price) / Unit

Example 1: You want to exchange RM10K to USD. You should able to get:

RM10K/3.035 X 1 = USD 3,294.89

Example 2: You want to exchange RM10K to RMB. You should able to get:

RM10K/46.65 X 100 = RMB 21,436.23

Example 3: You want to exchange USD10K to MYR. You should able to get:

USD10K X 3.015 / 1 = RM 30,150

Example 4: You want to exchange RMB10K to MYR. You should able to get:

RMB10K X 46.00 / 100 = RM 4,600

Key Notes: The lower of the buying price (we sell) or the higher of the selling price (we buy), the more money that you will be getting back after the conversion. Thus, if you want to compare with different money changers, look at the lowest buying price (we sell) and highest selling price (we buy) that they can offer. It is a similar concept with buy low and sell high. If you want buy, look for the lowest price. If you want to sell, look for the highest price.

Happy traveling! :)

p/S: The different between the selling & buying price is where the money changer makes their money!


Anonymous said...

If you going overseas, make changes at the terminal C KLIA at CIMB Foreign Currency Exchange ATM machines. The rate was much better than normal money exchanger booth.

ChampDog said...

Okay really? Thanks for the tip. So I guess we can withdraw with other banks card too.

Alvin said...

oo nice tips. Thanks :D I always exchange at the Midvalley 1. :P

ChampDog said...

Ya, usually cheaper if we can withdraw foreign currency with ATM.

This money exchange could be confusing if you try to exchange your money oversea because it is the other way round.

Anonymous said...

Yes, you could use another bank ATM card which work through MEPS network. So you will be charged RM1 per transaction.

m i c h e L L e 晓婷 said...

I reckon that LCCT has CIMB ATM machine that dispense foreign money as well, right?

ChampDog said...

I honestly do not know. So, LCCT has that too? :D What foreign currency the machine has?

So far, I still go to money charger and have not yet tried the withdrawal from ATM. If there is one available in Penang, I will consider.

Robert Miras said...

I never had tried to withdraw on ATM machines though it is included on my bank accounts promo deals. I always comes to the money changer machines or store.

coin counters

ChampDog said...

You can also use credit card to withdraw the money at ATM too especially when you're in oversea. But, I think the charge is higher.

Anonymous said...

I just surfed in,I find your blog rather interactive.I was wondering,can you make some sense of what my neigbour told me! He say's he buy's from the moneychange low,then he will sell it to the bank again.I think,he did mention,it was quite a significant sum.He will keep on buying currency and selling it to the bank for several times in a day.I was wondering,how does he make's money by buying from the curreny and selling it to the bank and doing it over and over again in a day???

ChampDog said...

That will be only true only if he able to buy low at the money changer and sell high at the bank. In other words, the selling price at the money changer counter is lower than the buying price at the bank. This also means the money changer sell very cheap and bank buy it very expensive.

If what you said is true, my bet is it can only happens once in a blue moon so you will need to monitor the prices very closely between the bank and money changer. It cannot be happen all the time. This also means that it is unpredictable too. When things are unpredictable, there is no difference than you’re trading the currency. So this strategy works but there is not much difference then you’re trading the currency. It is still high risk, and you still need to monitor that closely. Let me know if this is wrong.

buy and sell said...

great tips. i usually just change from sg wang there. best rates in town!

Carrie said...

thanks for the info! really helps..but was wondering because we are traveling to Korea soon, & my friend told me that it's more worth your money if you exchange RM to USD first in Malaysia then only change USD to Korea Won when reach Korea. How is that so? Couldn't picture it...

ChampDog said...

Huh? It doesn't make sense. One possibility is when you change RM->USD, the USD drops, then when you change USD->Won, the USD goes up. :)

Korean is a nice place. Have a lot of nice food too! You will find it is a very clean city although there isn't any dust bin. LoL! Enjoy your trip!

Anonymous said...

Hi thank you for ur info! I just wanna confirm... if im changing RMB to SG. I should look at "we buy" and the higher the better right? Thank you for ur help.

ChampDog said...

Assuming you're in China and want to buy SG$, you should look at "We Sell" instead. It should be the lower the better. :)

Anonymous said...


I wonder if there's a typo for the last paragraph. The first sentence you wrote, the lower the (we sell) column and the higher the (we buy) column. But the last sentence you told us to look for the highest (we sell) and lowest (we buy).

My impression is lower we sell column so you pay less for the same amount of foreign currency and higher we buy column so you get more for same amount of foreign currency...

ChampDog said...

Nice catch! It is a typo in the last paragraph and your understanding is correct.

Thanks for the correction! I will correct it now.

anep said...

thanks for the equation.. :)

TUHIN said...

Very good.

income fund said...

It's true!Learning how to manage and grow your money is the only way for getting rich.

Lisa Anwood said...

Thank you so much for sharing this valuable info. Earlier, I didn't know how to read buying & selling price in money changer counter.

buttercup said...

Hi, two questions on money changer vs. ATM/Cirrus withdrawal (from CIMB Savings account) while in overseas. My bank charges RM 10.60 flat rate per withdrawal. Is this better than getting money exchanged while in Malaysia?

Similarly, 1% per transaction on Credit card purchases. Is this worth it or should I just stick to money changing before travelling?

Sorry, can't see the full picture. Any advise will be much appreciated tq!

Abby Lim said...

Good explaination.

ChampDog said...

@buttercup, usually getting money exchanged in Malaysia before you travel is better rate than oversea withdrawal and the rate in money changer also usually better than the bank. If you really need calculate, you need to factor in the exchange rate between these 2 methods.

I use citibank bank atm which has $0 fee but the exchange is slightly higher than money changer (but not all the time).

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