Finance, Forex and Investments

can agents charge higher than actual exchange value for personal benefit?

I have to pay my fees to NZ $ from Indian Currency. Though I have to issue the cheque in favour of Punjab national bank and the bank will transfer money to the Institute the agents are saying that the value of A NZ$ against INR is Rs. 34.5 which is 2 rupees higher than the actual value I see on the net. Can you tell me if there is something wrong in the middle? Please assist.

Public Comments

1. the list price you see on the ticker on tv is just the price of the last trade. if you place a market order for a stock that has a list price of $34.50 but there is a bid out there to sell the stock at $35.00 per share the person executing that trade could fill your order at $35 even though it was not in your best interest to do so. there are many reasons why they could be charging you a different exchange rate, maybe their rate is more up to date than yours. maybe they are charging some other fee that is legal in new zealand. as i am unfamiliar with the laws and customs of either new zealand or india i cant say for sure.
2. There is nothing wrong. What you are experiencing is called a spread. Currency exchange firms hedge against currency fluctuations by charging a spread from the spot price. For example, the spot price is NZ$1 = INR 32.5, a currency exchange service will offer to exchange NZ$1 for INR 30 or INR 35 for NZ$1. In this example, the exchange spread would be about 15%. This spread represents a premium for the service provided, and is customary with exchange services to have a spread in addition to exchange fees.
3. There is no "actual exchange value" because there is no official rate because there is no central exchange. The rate is whatever the dealer is buying or selling for at the moment. Note that the agent is not charging you a commission. He buys at one price and sells at another and keeps the difference for his profit and cost of doing business. Are you paying fees of NZ$5,000,000 or more at one time? If not, then don't worry about prices you see on the net. Those are for large bank-to-bank deals. Retail transactions will have wider spreads and different prices than what banks pay each other. You are not being cheated. That's just the way the market works. If you think it's a good business, then become a currency exchange dealer.