I work in hotel. Lets say i bill a customer in USD but the customer wants to pay in GBP. Do i use the selling or buying rate? Is buying rate always higher than selling rate?
2006-07-27 02:00:48 · 6 answers · asked by thirsty 2 in Business & Finance ➔ Investing
Nobody here has a clue what you're talking about. You clearly stated a Forex question, meaning the Buy/Sell quotes of any currency pair. This is very similar to the Bid/Ask quote system in the stock market and elsewhere.
You want to be careful not to pay the spread difference; your customer is the one who pays that. You want to "make" the spread difference, since you are the "broker" or the "House." You set the rules.
The current GBP/USD quote is to Buy at 1.8585 and Sell at 1.8582, with a 3 pip spread.
Your customer is going to sell you his Pounds at 1.8582, and you are going to turn around and sell them on the open market for 1.8585
Since your customer wants you to perform a service, he pays the spread. You act as broker. you pocket the spread. So you always take his currency at the lower price and convert it at the higher price.
2006-07-27 17:23:45 · answer #1 · answered by dredude52 6 · 0⤊ 0⤋
For your first question: Use the buying rate.
Because since the bill currency is in USD and the customer has no dollars, the simple standard thing to do is for the customer to go and buy dollars and then pay the hotel.
As for your second question, yes - usually buy rate is higher than sell rate.
2006-07-27 09:16:21 · answer #2 · answered by gihan_rashad 3 · 0⤊ 0⤋
You should use the selling rate. Buying rate is always higher than selling rate as this is the only way that one can earn the margin from the buying and selling of currencies.
2006-07-27 10:25:44 · answer #3 · answered by BL Tan 2 · 0⤊ 0⤋
You make use of the rate that is most favourable to you.
Also, if let say the official rates are say 3.00 SGD to 1.00 GBP, Its is normal to charge the customer a 10% levy, therefore, the customer will have to pay you 1.1GBP for a 3.00SGD bill.
2006-07-27 09:22:34 · answer #4 · answered by Xanana 3 · 0⤊ 0⤋
with regard to the GBP, it is always a direct quote. which means that you say interms of GBP (one GBP equals to how much foreign currency).
Being that you have to buy GBP, quoting sell rate (as the sell rate will be the rate more than the market rate with a margin).
For anyother currency, say INR (indian rupees), it will be indirect quote, and you will have always buy at buying rate.
2006-07-27 09:13:35 · answer #5 · answered by Achudha 2 · 0⤊ 0⤋
Selling i think.
2006-07-27 09:04:03 · answer #6 · answered by mosaic 1 · 0⤊ 0⤋