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WHAT ARE THE DOCUMENTS REQUIRED FOR MONEY EXCHANGE?
Whether you are travelling to some other country or coming back from a foreign country, you need to exchange the currency in both scenarios. Changing foreign currency has come a long way in India since there are so many options available now for you to exchange your desired currency. The most popular and preferable currency exchange mediums are commercial banks, RBI-approved money changers, airports, or online foreign currency exchange platforms. When you plan to visit a foreign country, you buy a foreign currency in exchange for your domestic currency, for example, a Dollar to Indian rupee. And selling foreign currency is when you return from a foreign country and you want to exchange the foreign currency for your domestic currency. Currency exchange can be done easily by choosing any one of the alternatives. These currency exchange platforms charge you an exchange rate that determines the value of your currency in a foreign currency. To buy or sell the foreign currency, you need to provide some documents to the currency exchange platform to verify your identity. Before understanding the documents required for money exchange, let us understand what are the factors that affect the currency exchange rate and if all the countries have exchange rate policies.
Types of Money Exchange Rates
There are two types of money exchange rates; flexible and fixed exchange rates. For some countries, the exchange rates change depending on some factors, while some countries’ currency exchange rates change very rarely.
Flexible Exchange Rates
Most country’s currency exchange rates are determined by the foreign exchange market. The exchange rates fluctuate very often and the government doesn’t really intervene to keep the exchange rates fixed. Hence, this type of exchange is called a flexible exchange rate.
Fixed Exchange Rates
Some countries’ currency exchange rates like Saudi Arabia change very rarely. The exchange rates change only when the government instructs the banks or currency exchange platforms to do so. Hence, it is called the fixed exchange rate.
Factors That Affect the Exchange Rates
There are a few factors that determine the exchange rate of a country, and because of these factors, the demand for the currency is determined.
Interest Rate Paid by the Central Bank
The higher the interest rate is paid by the Central Bank of the country, the greater the value of the currency will be. The investors will exchange currency for a higher-paying currency.
Money Supply by the Central Bank
If the government prints a surplus amount of currency in a country, the goods and services will fall short in comparison to the money supply, which ultimately gives rise to inflation. A country with high inflation can push the value of the currency down.
Economic Growth and Financial Stability of a Country
A country with a strong and growing economy will enable the investors to buy and sell the services. On the other hand, a country with poor economic growth and financial stability will restrict the investors to put in any money.
Documents Required for Money Exchange
When you buy or sell a foreign currency, there are some documents that you need to keep in handy to prove your identity. Here is a list of documents that you need for money exchange in India.
For Buying Foreign Currency
A valid passport
A valid VISA for the country you want to travel
Confirmed ticket (travel within 60 days once got the exchanged currency)
For Selling Foreign Currency
Valid passport (mandatory for transactions above INR 25,000)
In case you are an NRI and looking for any specific bank services for the NRO or NRE account, then you must carry the overseas address proof.
Whenever you need a foreign exchange in India or from a foreign country, Muthoot Finance has got your back to provide you with the desired currency with accurate exchange rates. Our exchange rate services are executed as per the RBI guidelines and we ensure to provide our customers with the best-in-class money exchange services in India without any hassle. Muthoot Finance also offers its customers a currency rate converter where customers can check the prevailing exchange rates before going ahead with the currency exchange. Muthoot Finance currency exchange services are available online as well for the ease of our customers.