To some, the forex market is a financial behemoth that sees an estimated $6.6 trillion traded globally every single day. However, this market is also underpinned by fluctuating currency exchange rates, which dictate how much you’ll pay for international currencies when travelling abroad.
However, many countries accept a raft of domestic and international currencies, with Malaysia offering a relevant case in point. In this instance, you need to select a currency that offers the best value for money, in relation to real-time exchange rates and your total budget.
We’ll consider these factors in more detail below, while appraising the best currencies to use when visiting Southeast Asian locations such as Malaysia.
Using Currency in Asia – The Key Considerations
Throughout the coronavirus outbreak, the Malaysian ringgit has become one of the best-performing assets on the foreign exchange. However, this trend has declined of late, making it more affordable to buy and achieve superior value for money as a traveller.
This is particularly true when it comes to the GBP, as the ringgit continues to trade in an increasingly narrow range against sterling.
In fact, Malaysia is widely considered to be one of the most affordable places for Brits to visit from the perspective of currency exchange rates, and the real-time weakness of the ringgit against the pound has only served to compound this long-term trend.
Interestingly, this offers far better value than either the US Dollar or the Euro, with the ringgit performing far more robustly against both currencies. More specifically, it has actually embarked on an upward trend against the greenback of late, rising by nearly 6% since the lows record in mid-November.
Sure, this is based on relatively low levels of volatility, but it continues to have a direct impact on the MYR/USD exchange rate and the amount of money that travellers can buy in the real-time market.
Interestingly, the same trend currently applies in nations such as Indonesia, with the pound offering clear and live value in an increasingly volatile marketplace.
When Should You Exchange Your Cash?
When actively drawing cash or exchanging funds for use overseas, it’s also important to optimise value by determining the best method of withdrawal. You’ll need to time your transaction well too, in order to achieve the best possible rate of exchange.
Interestingly, the most common methods rarely offer the best value for cash, starting with the exchange of currencies at the airport after arriving in Asia. While this is a reliable and trusted method of transaction, the exchange rates are usually not particularly favourable from the perspective of travellers.
The same issue applies to using ATMs, which rarely benefit from the best or most current rate and can incur significant local charges from specific banks.
With this in mind, one of the best options is to plan your transaction ahead of time by keeping your finger on the pulse of the global forex market. Simply by using an official demo or forex trading account, you can track international currency rates in real-time by identifying near-term trends that are likely to trigger specific fluctuations.
This way, you can time your transaction before you travel and access the best possible rate, while simultaneously avoiding the element of chance and the need to incur hidden transaction fees.