Expatriates - Managing Forex
Because a large part of an expatriate's earnings, expenses and savings are likely to be in a foreign currency, ensuring that any foreign currency exchange occurs efficientlly and cost effectively throughout an expatriate's career is very important, and not just when a large repatriation of funds is scheduled.
Firstly, however, you need to put foreign exchange earnings into a financial planning context. For example, if you plan to retire overseas rather than return to Australia, or you believe that holding some foreign assets provides a hedge against a declining Australian dollar, then you may have a different approach to the repatriation of earnings or assets to Australia.
The following sections do not concentrate on the investment issues surrounding foreign exchange, but on some of the transactional issues and the (often) substantial costs that expatriates will encounter on forex transfers, and a few of the mechanisms that can be used to provide some certainty into the future about the value of an international transfer.
These sections also largely assume that an expatriate will be resident n a country where there are no prohibitions or restrictions on (hard) currency repatriations – these are now very uncommon even in developing countries but can be mind-numbingly complex. You will often need the help of your employing company or local professionals in addressing these restrictions in any sensible fashion.
OFX, which is listed on the ASX, has been an Exfin partner for many years and provides a very wide range of tools, including access to historical rates for currencies going back to 1990, allowing users to put current rates in a longer-term context. They also represent a very viable and cost-effective alternative to transferring currencies using banks which should be explored by expatriates.