21 Sep 2023
According to a report by NDTV, out of total 32 million Indian diasporas, over 18 million migrants live in foreign countries to earn a living and for education. Several Indians live in Ireland as well besides other countries; those who work and earn there typically send money to India from Ireland to offer financial support to their families back home.
A report by the Embassy of India, Dublin, Ireland, said that around 45,000 Indians live in Ireland for work. The likelihood of more Indians coming to Ireland is high due to the demand for skilled people in Ireland, the same report continued to state.
Indian diaspora is the biggest migrant population worldwide, with an equally huge financial contribution to the Indian economy through inward remittances. A report by the World Bank (WB) said that the Indian migrants had sent $111.22 billion in inward remittances in 2022 alone. This is the biggest amount any country has ever received in inward remittances.
Finding a job in developed countries like Ireland is not a big challenge. What is the challenge, then, you wonder? Think about it.
In most cases, you keep wondering how to send enough financial support back home to serve the purpose, which is to help your family lead a financially decent life. Right?
This is what this blog aims to answer. Continue reading for a better understanding.
In this blog, you will understand the currency exchange rates and how to get the best deals on your international money transfers because the impact of the fluctuating currency exchange rates is pretty high on your money transfers. Whether you send money online to India from Ireland or elsewhere, the impact of currency exchange rates can sway your transactions either way.
Therefore, we will explain currency exchange rates, their types and how they work. Once you have understood it all, you will be guided on getting the best deals on your transactions by getting the highest currency exchange rates.
You work in Ireland. Right? What currency are you earning money in, considering you hail from India? What currency will your family need to spend in India where your financial aid sent from Ireland is supposed to reach?
Can you spend Euro in India as you would the Indian Rupee? No.
To answer all of these questions, you have to convert foreign currency into the local one.
For which knowing and understanding currency exchange rates is essential. If you do not have any idea about it, the chances are that the service provider will fleece you in this area and will offer you uncompetitive rates, which will throw your financials into disequilibrium.
A currency exchange rate is a rate at which you either sell or purchase one unit of your currency for another currency. This rate affects trade between countries and also impacts the movement of currencies between two or more currencies.
The determinant factors of a currency exchange rate are the economic activity, interest rates, trade and commerce, and the rate of unemployment in respective countries.
Normally, different currencies are referred to by their acronyms in the process of conversion. For example, if you want to convert the Irish currency into the Indian currency, you will refer to them as Euro and INR.
The rates at which you sell or purchase a currency, however, differ.
Look at the two rates below. (The following rates are sought on Tuesday, September 19th, 2023).
It means that if you send money to India online from Ireland consisting of one Euro, the recipient will likely get INR 88.9957 back in the country.
But these rates constantly fluctuate.
Understand here how remittance transfer companies determine exchange rates.
Let’s now understand the different exchange rate types.
There are three main types of currency exchange rates that are in effect in the world today. There are as follows.
Fixed currency exchange rates do not fluctuate because the weaker currency is tied to the stronger currency at a fixed rate. For example, the Reserve Bank of India (RBI) will peg its currency at a fixed rate against Euro.
So, you will get that fixed rate regardless of the current rate in the international market.
These rates are determined by the forces of demand and supply. For example, if a currency is in high demand, its rates, both selling and purchasing, will be high. A prime example is the USD. But if the demand for that particular currency drops, its rates will also come down.
These rates are a blend of both fixed and flexible currency exchange rates. In this currency exchange rate system, the central banks can intervene anytime to manage rates or participate in the selling and purchasing of foreign currencies.
As an Indian migrant, the best practice for you is to find a service provider that offers you different ways to send money to India from Ireland because you might have to struggle with the exchange rates if you transfer funds with a company offering limited money transfer options.
Let’s put it straight.
There is little a service provider can do in this regard. Because global factors impact currency exchange rates and also create risks; for example, a war between two countries can add risks and sway rates either way. And any company cannot do anything in this regard.
But the silver lining is to offer you flexible rates on your transactions because these allow you to wait for the rates to spike and move in your favour. Or to initiate a transaction right away. You, as mentioned earlier, wish to send maximum financial support back to your family. Right? So, in this context, the company offering live exchange rates helps mitigate the risks. For example, it allows you to wait when rates are low and initiate a transaction when they are high, allowing the risks to take care of themselves and offering you the best deals.
In the above context, your every money transfer from Ireland to India with ACE Money Transfer is only a financial comfort and your unwavering support in saving and sending more back home. The firm not only offers live and market-competitive currency exchange rates, but it also charges a low fee and offers multiple ways to transfer funds with a wider network, speed and unbreakable security protocols.
FAQs
What is a currency exchange rate?
Currency exchange rates are the rates at which you sell or purchase one unit of a currency, or many, for that matter, for another currency. For example, how many INR will be required to buy one Euro is determined by the exchange rates.
What are the different types of currency exchange rates?
The different types of currency exchange rates are fixed or pegged exchange rates, flexible or floating exchange rates, and managed floating exchange rates, which are a blend of the earlier two rates.
What factors determine currency exchange rates?
Several factors, such as economic activity, import and export, wars, natural calamities, and the demand and supply of a particular currency, determine exchange rates.
How do rates affect my money transfers to India?
Your money transfers to India are impacted by the rates because of their fluctuating nature. If a service provider offers you fixed rates, you might not get the best rates, which may be prevalent in the international market at the time of the transaction.
How can I get the best exchange rates on my money transfers to India?
You can get the best currency exchange rates on your money transfers to India if you choose a service provider whose rates are linked with the international market and are live. It will allow you to initiate a transfer once rates spike and move in your favour.
Resources:
(At 18 Million, India Has The World's Largest Expatriates Population (ndtv.com)
(Personal remittances, received (current US$) - India | Data (worldbank.org)
