Following the leak of the Panama Papers, offshore banking – and its capacity for exploitation by the rich – has been hitting headlines more than usual. Moreover, just before the 2016 anti-corruption summit – which took place in London at the beginning of this month – a large group of the world’s top economists put their names to a letter which called for an end to tax havens. Read more
It’s a tough time for the global economy: the increasing volatility of the Japanese and Chinese economies, Greece potentially exiting the Eurozone and tumbling oil prices are all contributing to growing uncertainty.
In this kind of climate, there’s usually one thing on investors’ minds – to ‘futureproof’ their assets. This often means moving them to ‘safe haven’ currencies. The last few months haven’t, however, seen the usual cash flows from unstable to stable currencies. What’s going on and what will it mean for international money transfer?
Slumping commodity prices have caused the Saudi Arabian economy to struggle, putting pressure on the long-standing ‘peg’ (fixed exchange rate) between the Saudi riyal and US dollar. This turbulence could have far-reaching implications for international money transfer – read on to find out more.
In the developed world, sending money domestically is as simple as logging onto online banking. If you want to transfer funds in or to the developing world, however, you’ll often come up against a fairly fundamental block: the ‘unbanked’ phenomenon. But could the growing numbers of online platforms, from Gmail to Facebook, stepping up to the payment plate help societies break through the unbanked barrier? Read more
Most of us will know of the black market as the unlawful trade of goods and services. This is slightly different from the grey market, where trade occurs legally but through unofficial channels. So what exactly happens in shadow economies, and more importantly, what effect does it have on global growth and currencies?
Financial services regulation is a careful balancing act – it’s essential to keep your money safe, but it can quickly become expensive for businesses. The Economist recently argued that regulation is one of the international money transfer industry’s biggest problems for exactly this reason. Read more
One way to make the most of savings you’d like to grow is by tapping into new investment markets. This could mean looking abroad, in particular at countries that drive global growth. Today, emerging markets in developing nations are poised to do just this – become the world’s new growth engines. As with any financial investment, however, it’s important to measure and manage your risks. Here’s a breakdown on emerging markets and what investing in them means for you.
The global money market changes fast, from one minute to the next. If you’re making a big international money transfer, it can be tricky to decide when to do it – what if you’re not ready yet, but the exchange rate seems like it’s going to fall? We’ve got several ways to help you get the rates and security you need. Read more
Free trade allows the flow of money from places that have it to places that need it – places of opportunity. That’s the theory. However, in 2010 the IMF, historically free trade’s staunchest defender, conceded that government intervention in markets and trade through capital controls could be justified. That debate has come to the fore again in 2015, as Greece has used them to stop its economy from spiralling out of control. We look at what capital controls are, when they’re used, and how they impact international money matters.
What are capital controls?
The fintech industry has exploded in recent years, slowly growing into niches once dominated by big finance. In the international money transfer market high street banks and wire transfer companies like Western Union are starting to find themselves undercut and outperformed by innovative startups. But what is it that gives these fledgling companies their edge? Read more
Currency trading might happen in pairs, but don’t let that fool you. In the world of international money transfer, every currency is interconnected, meaning local issues can trigger widespread changes. So whether you’re a German software developer, a British lawyer or an American accountant your finances are linked – in however small a way. Today, we’re going to explain how that works.
Among the biggest connections between seemingly distant economies are commodities like oil, coal, iron and other industrial essentials. Fluctuations in commodity prices can send tremors through the global economy.
For example, when oil prices started sinking fast a couple of years ago, oil-dependant countries like Venezuela, Norway and Russia all saw their economies (and currencies) devalue. Importers like India, by contrast, saw their economies (and currencies) benefit from lower prices.
If you’re transferring money to or from a country that’s dependent on a commodity, tracking changes in its value can tell you a lot about the health of your currency pairing. These are the kinds of factors foreign exchange brokers analyse, helping to get you the most for your money.
China is one of the world’s largest and most important trading partners, both as an exporter and as a growing economy drawing financial investment. That means that when Chinese shares fell by more than 8% at the end of July – the biggest one-day loss since 2007 – the impact on other emerging markets was immediate. The index used to track those markets’ strength dropped by 1.8%. Currencies including the Malaysian ringgit and South Korean won hit major lows. The reason? A chief trading partner’s economy was facing trouble.
As in the case of commodities, brokers pay close attention to these developments to protect your funds. They can use a number of tools to limit the impact on your finances, from ‘forward contracts’ to ‘fixed payment plans’.
Foreign exchange reserves
Buying and selling another country’s currency is a fundamental part of every nation’s fiscal policy. By building up a store of foreign money, known as ‘foreign exchange reserves‘ countries can influence exchange rates.
That’s what China attempted to do by purchasing US dollars and what Russia was aiming for by unwisely investing in the euro. In both instances, those nations wanted to devalue their currencies to create competitive prices on the global market. This has worldwide consequences: the value of reserve currencies becomes inflated, and countries with lower cash reserves can’t keep up.
But no matter where you’re sending money to or from, our brokers can help you safeguard against these situations. Find the right one for your needs with our international money transfer comparison tool.
It’s no secret that the cost of sending money abroad hasn’t always added up. However, the rise of foreign exchange brokers and tech-driven transfer companies has started to change that. So it’s no surprise that new statistics from TransferWise have revealed we’re finally waking up to the fact that the industry’s historically favoured providers are not playing straight with us. Read more
Banks raising their interest rates might not sound like something to get excited about, but it’s a sure sign of faith in a nation’s economy. For the last six years, the Bank of England’s rates have been at a record low of 0.5% – a move designed to encourage borrowing and stimulate the economy when unemployment is high. Read more
Sending money overseas via a foreign exchange broker doesn’t necessarily mean you’ve got to hand over total control. While they can take care of everything for you, understanding the basics of trading can help you make the most of your international money transfers. It’ll also put you in a much better position to benefit from automated trading platforms or peer-to-peer services. That’s why we’ve put together this six-step guide to getting more involved in your trades. Read more
Economic integration isn’t a new concept to Africa; sub-regional markets have emerged throughout the continent since the ’60s. But while there hasn’t been as much integration in the past few decades as many leaders would like, that’s looking set to change. A recent African Union summit set a 2017 deadline for the creation of a continental free-trade area, building on the Tripartite Free Trade Area (TFTA), which covers 26 countries.
Today we’re looking at what such an expansive free-trade area could mean for Africa’s social and economic development. If it manages to propel to some of the world’s poorest countries towards prosperity and stability, it has every chance of shaking up the global economy and foreign exchange for the better. Read more
The worldwide payment landscape is typically split along three lines: cash, plastic and tech. India’s Finance Minister, Arun Jaitley, has recently declared it’s time for his country to make the move from the first to the second of those two, but is plastic really the best path? We’re not so sure. Read more
When he was re-elected prime minister of Japan in December 2012, Shinzō Abe laid out a plan to end the country’s decades-long economic slump. His short term goals were to boost GDP and raise inflation to 2%. Long term, he hoped to stimulate competition and cement trade partnerships. But despite its successes, Abenomics is facing increasingly vocal opposition. Opinion in Japan is fiercely divided, so what do these policies mean for you? Read more
WorldRemit, like TransferWise, has recently received an eight-figure vote of confidence in its international money transfer service. It joins a growing list of well-funded fintech companies innovating the market by offering low or non-existent fees and transfer tools that cater to the digital age. Read more