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Here's how exchange rates work

If you're planning a trip overseas or if you're sending money to another country, the process of buying or selling foreign currency can be confusing. We'll try and make things easier to understand.

What's an exchange rate?

An exchange rate is the difference in value between two currencies, such as the Australian Dollar and the US Dollar. These rates are constantly changing due to a number of factors such as a particular country's:

  • inflation rates;
  • interest rates;
  • trade balance; and
  • economic growth and stability.

An exchange rate reflects the difference in value between two currencies. These rates are constantly changing due to a number of factors. 


Look for the right rate

You can buy a foreign currency (perhaps when preparing for an overseas trip) and also sell it (such as when you come back from that overseas trip). When checking the exchange rate, it’s usually easier to find the right rate if it’s listed from your perspective, such as ‘I want to buy’ or ‘I want to sell’.

But occasionally, you may need to look out for the 'bank sells' rate if you intend to exchange local currency for foreign currency, and the 'bank buys' rate if you are exchanging foreign currency for local currency. 

There may even be a few different rates displayed for each currency, including rates applicable to:

  • IMT or Transfer: an International Money Transfer is the usual way for you to send your money overseas via a bank. This is also sometimes called 'TT', for Telegraphic Transfer.
  • Travel cards: this rate is for products like the ANZ Travel Card, which you can load with selected foreign currencies.
  • Cheques: if you're getting a bank draft issued in a foreign currency.
  • Notes or Cash: if you're getting foreign currency cash, this is the rate you'd use.

If you come across an 'indicative mid-market rate' (on the Currency by ANZ app, for instance), this means that it is a rate that is determined by ANZ and is approximately halfway between the current buy and sell rates from the global wholesale currency market. Bear in mind it's only a guide and not a rate which you can use to buy or sell currencies.

How to check foreign exchange rates

You could refer to our Currency exchange rates page, or use either of these:

 ANZ currency converter

Currency by ANZ app


How current are the exchange rates displayed?

How up-to-date the currency exchange rates are, would depend on what rate you are looking at. Always check the currency exchange rate page for details on when and how often rates are updated.

On this website, for instance, the rates you see on the Currency exchange rates page are updated every day. But if you're making an ANZ International Money Transfer via Internet Banking, real-time market rates let you take advantage of exchange rate movements during the day and lock in the rate that suits you.

If you want control of your conversion rate, consider transferring it in foreign currency (not Australian Dollars) to lock that amount in.


Making an international money transfer

Here's what you will generally need:

  • Name of currency and amount you'd like to send.
  • Full name, address and account number of the person/receiver you're sending the money to.
  • Full bank name, address and SWIFT BIC (Bank Identified Code) or Branch Number (some countries accept this) of the receiver's bank.
  • IBAN (for payments to Europe and selected other countries) or Routing Number (for payments to the US).

Before you commit to a transfer, you should find out what fees or charges you'll be expected to pay. And if you want control of your conversion rate, consider transferring it in foreign currency (not in Australian Dollars) to lock that amount in.

The information set out above is general in nature, is for information purposes only and has been prepared without taking into account your objectives, financial situation or needs.  By providing this information ANZ does not intend to provide any financial advice or other advice or recommendations.  You should seek independent financial, legal, tax and other relevant advice having regard to your particular circumstances.