Originally Posted by
nkedel
Only if by "in another country" you mean the interbank rate.
Taking 4/6/2007 as an easy example to find, the in-country rate buy rate for dollars posted by Bangkok Bank was 34.17* while OANDA.com shows a historic forex market rate (not a bad proxy for the interbank rate) of 32.14. Not a huge spread (ISTR it being as much as 3 baht per dollar at the worst) but starting to be significant especially as it coincided with a relatively big drop in the relative value of the dollar. Nowhere near as dramatic as the advantage of the informal exchange markets in Argentina, of course!
Oooooohhh! OK, this was the post that my brain needed - this makes 100x more sense now. I'm not a financier by any means - if people haven't guessed that yet - so when people were talking about "better" rates I thought they really meant "less bad". Because basically in my simple mind I always think about the big bank rates - Oanda, Visa, Citi, whatever - as being the best possible due to economies of scale, and then whatever a consumer can get approaches that; that's the theoretical limit of how good it can get. But you're saying that, at least at that time, there was actually such a hunger for USD, a la Argentina (though not as extreme), that they were providing motivation to get
physical cash from America into the country as a hedge against their domestic currency issues - something that wouldn't happen with wire trading of forex by big firms. Hence the actual incentive.
Got it now.
But it's apparently not like that anymore. So ATMs are fine? Or I should find and check big domestic bank rates against the VISA network and Oanda rates?
And thanks all for the info on the ATM DCC language. I'll try to stick to less-sketchy ATMs and keep an eye out for double and triple negatives and such!
Edit: FT101, thanks so much for the specific, detailed info in your 3:54 PM post!