The Hindu : Forex dealers quote different rates

Online edition of India's National Newspaper
Thursday, Oct 10, 2002

Business

Business

Forex dealers quote different rates

By Our Special Correspondent

NEW DELHI OCT. 9. With decentralised foreign exchange transactions allowed in the country, different forex dealers are quoting different rates for sale and purchase of foreign currency. Besides, the spread maintained by different companies between buying and selling rates is also different.

For instance, today's quotation for buying and selling of dollars by Thomas Cook were Rs. 47 for buying and Rs. 49.25 for selling to a dollar. However, Hong Kong and Shanghai Banking Corporation (HSBC) was offering Rs. 48.02 for buying one dollar and selling it for Rs. 48.50. State Bank of India quoted Rs. 48.16 for buying a dollar and Rs. 48.52 as the selling rate.

Similarly, Thomas Cook quoted Rs. 72.75 for a pound sterling as the buying rate and Rs. 76.50 as the selling rate. HSBC's rates were Rs. 74.23 for buying and Rs. 75.71 for selling while SBI was buying pounds at the rate of Rs. 74.79 and selling for Rs. 75.47.

Incidentally, the Reserve Bank of India's reference rate for the dollar was Rs. 48.34 and for the pound sterling Rs. 75.19. The RBI's closing rates were Rs. 48.31 for a dollar and Rs. 74.98 for a pound sterling.

Forex market sources explained that with liberalisation and decentralisation of the foreign exchange transactions, different banks were quoting different rates based on their individual assessments about volatility of the currency, its stock and flow and other "relevant parameters.''

The banking sources also indicated that these were retail indicative rates and there was enough flexibility with the banks to offer different rates for long-standing customers as well as bulk customers. Consequently, it was for customers to "shop around'' before deciding on where to buy or sell their foreign exchange.

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