Korean Job Discussion Forums

[cedarseoul]

Like so many of you, I've been keeping close track of the KRW/USD exchange rate over the past few weeks, trying to decide when & how much to wire...

Anyway, I've noticed consistent discrepancies between XE.com and KEB/Woori. I realize that the figure quoted at the Korean bank sites reflects the fees they withhold on conversion, so I understand that the two services won't line up exactly - but I often notice significant disparity between them.

For example: right now, xe.com quotes 1397.64/1 (a few minutes ago it was 1398.30, so I know that it's updating in real time). KEB quotes 1470.79 (buy rate), and again, it changed just a few minutes ago, so it appears to be real time as well.

Of course, the bank quotes are the only ones that really matter, but still - what gives? Why is there a 70+ won disparity between the two, and which service is more correct?

Just curious.

[ttompatz]

XE uses the real-time interbank rate... ( you could get similar rates IF you were talking about enough money)..

Your local forex counter (posted bank exchange rate) uses the cash rate...

you are correct in assuming they are not similar.

Not only do banks take out a spread as their profit margin, they also hedge the exchange a bit since they are holding actual currency (where most interbank transactions are nothing more than accounting with no real currency moving between the two).

.