How Exchange Rates Affect Your Money Transfers to Nepal from Australia?

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Nepali migrants residing and earning in Australia often opt for international remittances to transfer their money to their families in Nepal. However, the exchange rate greatly impacts the actual transferred amount in Nepal. It actually determines each Australian Dollar (AUD) converts into how many Nepalese Rupees (NPR), and that isn’t static.

To ensure efficient and beneficial cross-border money transfers, it is essential to understand how exchange rates work. In this blog, we will explore what an exchange rate is, how exchange rates impact money transfers, and provide insights on getting the best exchange rates to Nepal from Australia.

Understanding Exchange Rate

Basically, the exchange rate is the value at which one currency converts to the currency of another country. These are presented in currency pairs as they indicate the amount of one unit of a currency needed to buy a unit of another currency. For example, if 1 Australian Dollar (AUD) is worth 88 Nepalese Rupees (NPR), this means the exchange rate from AUD to NPR is 1:88.

Exchange rates are categorised into two main types:

Fixed exchange rate: A fixed exchange rate is set by the central or government authorities, and it doesn’t change over a specified period. Due to almost no fluctuations, the likelihood of unpredictable changes is reduced. This stability greatly benefits large enterprises dealing in international trade.
Floating Exchange Rates: In contrast, floating exchange rates change as per economic changes. These fluctuations are carried out to improve trade imbalances and incline with the global financial market.

What Is The Role Of Exchange Rate In Remittance?

exchange rates -australia to nepal

The exchange rate plays a vital role in determining money transfer rates to Nepal, as it directly impacts the amount received by the recipient. Let’s take a closer look at why these exchange rates are so important:

Value of Money Received

Currency conversion greatly depends on the exchange rate! If the exchange rate is low, the recipient receives less of the currency per unit of the sender’s currency. Similarly, if the exchange rate is high, the recipient receives more of the currency per unit of the sender’s currency.

Overall Costs

The exchange rate is one of the main determiners of the money transfer rates to Nepal. However, there are several charge parameters associated with it. Remittance service providers add hidden fees, transaction costs, or other charges that impact the total amount received by the receiver.

Timing of Transfers

Due to the dynamic nature of the exchange rate to Nepal from Australia, they flatulate all the time. Thus, it is crucial to understand how to choose the right time for the best exchange rates to Nepal from Australia. You can easily change the value of transferred money as per the favorability of rates.

What Are The Factors Influencing The Exchange Rate?

Exchange rates are subject to fluctuations, and even a slight change in the AUD to NPR exchange rate significantly affects the total received amount. Money transfer rates to Nepal fluctuate due to a variety of factors; some of them are mentioned as below:

Trade Balance

The trade balance is termed the balance between the rate of import and export. If the balance between both isn’t equal, it will impact the exchange rate. In case the exports are higher, the country sends most of its currency abroad. Thus the currency flow in the country is lower, leading to higher demand and exchange rates.

Supply and demand

The exchange rate massively depends on supply and demand. It is generally low if the demand is less or average and there is a lot of currency in the market. Similarly, the exchange rate is higher if the demand is excessive and there is less currency in circulation.

Political Conditions

Stability in the political conditions of both Australia and Nepal collectively contributes toward favourable exchange rates. In cases of political instability or change in government and trade regulations, it led to currency depreciation.

Consumer confidence

If the major population of the country is economically stable and the investments are higher, the exchange rate is also higher. Similarly, if there are major unemployment or inflation issues, resulting in a lower exchange rate.

Inflation

Inflation is termed the rate at which the cost of a country’s goods and services is increasing. If the inflation rate is higher, the currency is less valuable, leading to a lower exchange rate. Similarly, if the inflation rate is slower, the currency is more valuable, leading to a lower exchange rate.

Interest rates

When the interest rate in Australia is higher, it leads to an increase in the flow of currency in the country, leading to higher demand and strengthening of currency. It can lower the transferred money when sending money to Nepal from Australia.

How To Get The Best Exchange Rates To Nepal?

By sending money at the best exchange rate, one can send maximum money to loved ones in Nepal. Here are some steps that can get the best rate for your transfers:

Check the different remittance service providers and compare the overall fees they are charging to send money to Nepal.
Evaluate the exchange rate fluctuations to send money at the right time at the highest exchange rate.
Some remittance providers, like Remitby, offer special offers for their customers. You can use the coupons and offers to get a more favourable rate for your transfer.
Opt for online remittance platforms, as they offer better exchange rates compared to traditional banks.

Conclusion

Exchange rates greatly affect remittances and play an essential role in deciding the actual money transfer rates to Nepal from Australia. These rates fluctuate, but senders can maximise the value of their transfers by making informed decisions and choosing the right remittance service provider. Remitby is the leading choice for people looking to efficiently transfer funds to Nepal from Australia. We offer competitive exchange rates and low transfer fees to safely send your money to your loved ones. Get in touch with us to know more about our services.