The global marketplace is not a blip. It’s here to stay, and finding the best exchange rates is one way to maximize profits when doing business internationally.
If your company is part of the global market, there are several things you can do to survive and thrive in this increasingly competitive landscape. An excellent place to start is to consider the impact of exchange rates on your business and how to manage the risks.
When exchanging one currency for another, the exchange rate mainly determines the total cost of your transaction. The main issue is that exchange rates are like readings on a heart monitor – all ups and downs.
That’s because the forex market is under economic and political forces, and exchange rates can easily be influenced by things like inflation, global events and even economic announcements. It’s good when the exchange rate swings in your favor, but business deals can quickly turn sour when your international money transfer loses value.
Therein lies the risk in currency markets.
Hence, when dabbling in international business, you need protection against rate fluctuations and market unpredictability.
If you’re joining the global business arena, you can either do so by working with foreign suppliers, selling your products internationally, or both. Either way, it’s essential to consider the effect that exchange rates can have on your business.
For example, if you’re paying an international invoice, exchange rate fluctuations will change the cost of supplies purchased from a different country. As a result, the supplies can become cheaper or more expensive, depending on how the rate moves.
On the other hand, if you’re selling products to overseas customers, you must factor in currency conversion costs to remain profitable. Therefore, foreign exchange movements can determine whether your products sell like hotcakes or lose their attraction. It also determines if you’ll receive less or more money for your product or service than expected, directly impacting your bottom line.
The key takeaway is that when it comes to international payments, exchange rates can affect your business, whether you’re sending or receiving.
It’s possible to hedge risk and limit business exposure to fluctuating exchange rates. For the best results, consider partnering with a dedicated transfer provider rather than your bank.
Banks rarely have currency specialists that provide expert guidance and often charge a premium on foreign currency rates in addition to expensive international bank money transfer fees. It also doesn’t help that their service can be pretty slow, especially if intermediary banks are involved.
On the other hand, with a provider like MTFX, you can rely on two risk management instruments to stay on top of currency market movements:
You don’t have to be at the mercy of the market. MTFX can help you reduce the cost of doing business internationally. In case you’re wondering why you should use MTFX rather than your bank, here’s why:
Open a free business account today to enjoy competitive exchange rates and make the most of your global trade opportunities.
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