Private currency exchange
 

A few questions for the group.

I want to save the fees associated with exchanging currency at a bank. Is it possible to arrange to buy Euros from a traveler, say, at the airport as I am arriving or departing?

Does it make any sense? Will the traveler and I be able to save money by avoiding the fees?

I assume that it is black market, possibly illegal, but I know that travelers to South America readily exchange dollars for local currency at a much better rate than the posted exchange rate.

Are there any resources online about this?

Thank you in advance for any information.

Often at work if I am travelling to a country or currency zone from where a colleague has just returned from I'll offer to buy currency at the ft.com middle rate. I don't know if such private deals are illegal.

I remember once when working in France an English tourist came into a Citibank branch and asked to exchange his pounds into euros. The bank said they did not do this. Meanwhile we earned in euros and always wanted to exchange our excess cash into pounds. So we had a quiet word with him and exchanged the money. We took out fresh euros from the Citibank ATM just so he was sure we were legitimate (except for the possible illegality of the whole exchange thing!).

"Private currency exchange" is just a more polite term for black market currency exchange.

I don't think it's legal, but I've been rescued a few times by folks willing to make a trade.

I was in Myanmar before ATMs were around, and wandered around one of the local market hoping to find an exchanger. Same in Venezuela earlier in this month. Not everyone wants to take the risk - and in those two situations, the countries would have been prohibitively expensive if you went by the official rate - but it is possible, even if it shouldn't be.

Not illegal, at least for most currencies from stable and democratic countries.

I once traded money from a friend for a house. It was based on trust. The friend paid the escrow agent and I paid them by check.

I suppose you could do that for small amounts with a friend. Maybe you could do it for excess money from a trip. For example, if you had Japanese yen, go to the gate of a flight for Japan, say DTW NRT. However, you would have to trade a convenient amount for the other person, say exactly $20 or $100.

In a country with a pegged currency rate this is black market currency trading, generally quite risky.

In countries with floating currency it's perfectly legal but I wouldn't do it unless I trusted the person.

Private currency exchange
 

so after reading this thread, I've learned that trading currency is either legal or illegal.

Well, at least that means it's not a grey area.

Maybe someone can set up an app for buyers and sellers to meet up, like AirBnB or Uber. Then we can find out all the problems that can develop - like being banned from meeting up at the airport, for one.

Private currency exchange
 

Don't exchange money at a bank. Just pull it from the ATM when you arrive. You'll get the best rate... and likely one where a local wouldn't beat it by enough that'd be worth the risk. the only time worth going to the private/black/blue market is in countries with absurd pegs like Argentina or Venezuela.

I am thinking that if I buy 100 euros at the posted daily exchange rate, today its at 1.13$ then it would not be illegal. If the government says that 1 euro costs $1.13 then why can't I buy it from a private person. The only thing that I am not doing is paying a middle man for the service.

As long as I am not charging above the posted daily exchange rate it is not black market. Am I wrong?

Which is absolutely true. Depends on the country and the currency. There are some countries where you can go to jail for it. US, no problem.

I think I traded some Yemeni Rials this way. I had left over Rials and went to the gate in Dubai that had a flight for Yemen. I got UAE Dirhams in return and it all worked out. I think I've done it or Czech crowns too. It works well for oddball currencies.

Yes. Where US dollars and euros are concerned, the "posted" rate is just the current average at which those currencies are trading on open markets. They are neither fixed nor regulated by any government.

Just a couple of years ago, I worked as a teller in a bank and people were coming in all the time wanting to trade in their foreign money. We had a $200 minimum and our fees made it undesireable on top of that. I always said I'd be happy to change the money personally at $1 for €1\£1. I know that at the time as an employee of the bank it would be frowned upon but have always thought it wouldn't be an issue outside of that employment.