Buying forex: Compare exchange price offered by seller with interbank rate

One way to assess how much you paid is to compare the amount sent with the amount received

Reserve Bank of India (RBI) governor Sanjay Malhotra recently flagged concerns over the wide gap in foreign exchange (forex) pricing between retail and corporate customers. He said these disparities are far greater than can be justified by operational costs alone. His comment underscores the need for retail buyers to exercise due diligence when purchasing forex.

 

Components of forex cost

 

The first element is the exchange rate. “Typically, banks trade foreign exchange with each other at what is called the mid-market rate or the interbank rate. This is the rate Google shows when you search for the exchange rate