Exporters benefit from a weaker rand as they receive more money in rand terms for goods sold internationally.
- Banks typically charge two sets of fees for forex transactions: transaction fees and an exchange rate margin called the spread.
- The spread is the difference between the median exchange rate and what the forex provider offers.
- Banks are not transparent about the cost of the spread, so exporters do not know if it is fair or not.
- The spread can impact an exporter’s competitiveness by making goods relatively more expensive in foreign markets.
- Exporters can ensure maximum returns by using a forex provider that is transparent about the spread and charges lower transaction fees.
- Getting the best forex deal should be viewed as a business imperative, just like with other suppliers.
- While exporters benefit from a weak rand, they should look beyond the exchange rate to maximize forex returns.