Quote:
Originally Posted by nono1973
I do not know if i have been there before as there are just too many of them in that area,but i do have an ex. colleague's relative who's family reside in Batam and have a money changer inside Nagoya Hill Mall and another friend who is at BCS in the same trade. Under the same day,same hour,all of them were offering the same rate,when i compare with the Fat Girl money changer opposite Formosa Hotel. Getting the BEST exchange rate for me today is just a few calls away.
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Newbie method of money exchange is, ALWAYS compare the rate between at least 2 to 3 shops before deciding on the best given rate. (i need to emphasis this clearly to all reading this thread)
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It is how far apart between the money changer rate and the online Forex rate that i am more interested to know during the comparison. Instead of running around comparing money changer to money changer,i compare with the online Forex rates at that very few min point of exchange. More efficient and i know who REALLY REALLY give me the BEST rate.
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It would be a different comparison changing using USD to IDR and changing SGD to IDR. The rate is definitely higher than for USD to IDR. You have said that about a year before and i have experiment changing SGD to USD and then to IDR. There is not much difference becos in Batam,changing SGD to USD isnt going to give me any good deal.
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The money changers in Nagoya Hill and BCS offer very bad rates (the only worse one is the one in Harbour Bay on arrival).
Why I say that? Because I went and asked, or when I am lazy I just look at the screen.
Why is it obvious? Because they are in a large mall, with lots of tourists coming and going. Like a restaurant, they do not need to offer outstanding service to have many customers.
The best advice we can give is
"ALWAYS compare the rate between at least 2 to 3 shops before deciding on the best given rate." (I quote you, but it's the same advice I give).
Please note: every time I have 500 USD or more to change, I ask in not less than 6-7 places. The result has been always the same: there is up to 4%-5% difference between the worse (say in Nagoya Hill) and the best (always one of the 2-3 places at the extreme left on the big road facing NH, opposite side, walking left 1-2 blocks).
I am not surprised: if you have a desk which is not in front of NH, and there are 10 shops between you and NH, you have to offer a better rate, or nobody will walk till to reach you.
About your favourite place
I am sure you get a special rate from your favourite place in front of Formosa, because you are a returning customer. When I asked, I've been offered a bad rate comparable to that of Nagoya Hill (I am not a returning customer).
Next time, since you like walking to explore better opportunities, try to walk where I suggested and compare. You might be surprised and thank me.
Why rates can be so different?
For USD, there is a huge difference between changing $100 new bills and $10 old bills. Why? Think about what use will be made of those bills.
The same place which offers best rates for SGD will also offer best rates for USD? Probably, but not necessarily. Why? It depends what they do with the foreign bills they received from you.
How to measure and compare the "performance" of a money changer?
Compare the offered rate to the official interbank rate (the easiest way is to check on XE, there's an easy app for phones, or on Yahoo Finance, or on any financial news web site) and compute the relative "Delta".
Or, almost equivalently, compare the buy vs. sell rate.
Do this exercise in the Forex exchange office of an airport: you'll be scared to notice that they earn 20% or more! (even 40% difference between sell and buy, or +20% compared to XE)
A good bank will offer a delta around 2%-3%. If you use a Maestro debit card, you can lower it to 1.5% (most of the times, Maestro debit cards are the best way to get foreign currency overseas).
In some of money exchanges in Batam, this delta difference upon changing USD $100 new bills to IDR can lower down to nearly ZERO (once I saw even less). Why? Are they losing money? No. Simply, they change money "unofficially" and they give the USD to somebody who needs USD but cannot go to ask banks for changing. (Got the idea?)
The same happens with SGD changed to IDR? I am sure yes, but I cannot give exact numbers, neither I know if it is more convenient to change SGD or USD (I should make a large poll with 1000 SGD and 1000 USD in my hands).
Finally, can I make money changing SGD to USD then to IDR then to SGD? (or any combination of repeated changes). Or can be SGD to USD to IDR better than SGD to IDR?
Of course NO. Every time you change, you lose something (even nearly zero at best). The more you change, the more you lose. If it happens to see something like that be more convenient, you spotted a black hole in the market, some inefficiency, some "error" in the market. It is possible, but unlikely (like buying gold on the New York stock exchange and selling it 1 second later at the Singapore stock exchange finding two different prices and thus earning something)