Simplify the financial system | The destiny of foreign currency

Each Saturday, certainly one of our journalists, accompanied by consultants, solutions certainly one of your questions concerning the financial system, funds, markets, and so forth.

I wish to know what occurs to our banknotes after we trade them in different nations? Once I go to Cuba for instance and provides a $20 invoice to get the native foreign money, what are they going to do with these payments subsequent?

Stephen Lauer

Within the period of digital transactions, banknote exchanges have gotten more and more uncommon. Nonetheless, for vacationers, it’s nonetheless very handy to have just a little cash in native currencies when arriving at their vacation spot or to pay minor bills.

Subsequently, trade workplaces don’t disappear and monetary establishments proceed to supply foreign currency to satisfy these wants.

In Cuba or anyplace else on this planet, an trade workplace or monetary establishment that receives Canadian {dollars} in trade for native foreign money notes can use the cash it receives in numerous methods.

The establishment can maintain these funds in reserve to re-circulate them when the consumer wants Canadian {dollars}. He may also resell it.

That is what Desjardins does in its international trade actions, explains its spokesperson, Jean-Benoit Turcoty.

“At Desjardins, relying on the foreign money, the situation of the money and another standards, it’s attainable that part of these notes could also be held, recirculated, withdrawn from circulation or bought to our international cash provider.”

“It is dependent upon the kind of coin,” he says. If the demand for a international foreign money to be exchanged for Canadian {dollars} is adequate, as is the case for euros or US {dollars}, the cash changer will maintain them in reserve to satisfy the wants of Canadian vacationers who will want them earlier than leaving for Europe or the US.

If the demand for currencies is decrease, such because the Japanese yen, the changer can maintain a few of them or resell them to his personal international trade provider.

Monetary establishments cope with international trade suppliers that concentrate on the provision and demand for banknotes from all nations.

Thus, tickets of all nationalities flow into between consumers and sellers, all the time utilizing protected transport companies, resembling these provided by Brinks or GardaWorld.

Not all currencies can be found always. A Desjardins spokesperson mentioned that if a buyer wants a coin that’s wanted irregularly, they need to order it prematurely.

It additionally occurs that it’s troublesome to discover a coin.

For instance, Globex 2000, one of many primary trade workplaces in Montreal, warned its clients that the Brazilian actual, ruble and rupee have been out of inventory final week.