Brexit aftermath: Money markets

Money changers' rates yet to catch up

The British pound fell to its lowest level against the Singapore dollar, diving to just $1.797.

But while the plunging pound has drawn crowds to money changers, the deals on offer still lag far behind the official money-market rates quoted by banks.

Customers have to either shop around to find a better offer or wait until money changers adjust their rates to reflect the weaker pound.

The best rate at popular money changers at The Arcade in Raffles Place and People's Park Complex in Chinatown was £1 to S$1.885, with most hovering at the $1.90 mark. That means $1,000 would get you about £526.

But the interbank rate - the level at which large banks buy and sell foreign currency to one another - was $1.7966 at 7pm last night. The same $1,000 at that rate would yield £556.60 on official banking channels.

Money changers told The Straits Times that the banks and currency suppliers were selling pounds to them at rates of about $1.88.

The volatile pound made for a mixed picture at money changers. Mr Mohamed Rafeeq, 51, owner of Clifford Gems and Money Exchange at Raffles City, said demand for pounds was "very, very high".

Business soared by at least 20 per cent yesterday, he added. He told The Straits Times that he sold at a "loss" yesterday, giving rates of between $1.86 and $1.88, as he wanted to clear his stock to get new stock at a better rate.

Mr Arshad Hassan, 36, who manages Sheen International Exchange at The Arcade, said there was a sharp increase in inquiries about the pound but demand was relatively quiet yesterday compared with last week. He was offering about $1.892.

Mr Royston Lee, a 31-year-old finance executive, said he was planning to take a holiday to Europe, but would wait for the better rates to be reflected at the money changers before he changed Singdollars.

"The rates given by the money changers are still high. I'll expect to change when we are at more of a mid-way mark, perhaps about $1.85, $1.86," he said.

Mr Omar, president of the Money Changers Association, is not dealing in the pound at all. His firm in Geylang cleared its sterling stock last week and Mr Omar, who goes by only one name, does not intend to buy more till the end of the week, when he expects banks will sell to money changers at a lower rate.

Money changers expect their rates to better reflect interbank rates by the end of the week.

Banks were also experiencing higher demand for the pound, with United Overseas Bank reporting a tripling in demand from retail customers. OCBC Bank said the daily average buying volume of the pound had increased 4.3 times for premier clients.

A version of this article appeared in the print edition of The Straits Times on June 28, 2016, with the headline 'Money changers' rates yet to catch up'. Print Edition | Subscribe