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Under the vast foreign exchange market, there is a section that concentrates mainly with
determination of exchange rates specifically for the tourist. Therefore, tourist exchange rates
are foreign exchange rates that are specifically aimed at travelers and tourists intending to visit
foreign countries. Individuals intending to acquire foreign exchange for the sole purpose of
using the currency during their travels may be subjected to different rates from those in the
trading floors in the forex markets.


      

 

Information concerning the various tourist exchange rates can be acquired from travel agencies
or foreign exchange brokers. Also, the tourist exchange rates can be found online through use
of forex oriented websites. It is much cheaper to acquire the necessary information by just
browsing for a couple of hours rather than moving about. These websites may also give one the
option to purchase the foreign currency online without the hassle of queuing for long hours in
bureau de change offices.




 


  
 

The rates charged to tourists are usually higher than those determined in the forex markets
because the brokers do charge a commission for their services. This commission is assumed to
be the cost of transacting business and it is known as the spread. Also, because there is usually
a long chain of intermediaries in between the tourist and the forex market the cumulative
commission may drive the exchange rates up. It is more or less impossible for an individual to
access the forex market without the help of a broker and as such, these brokers may take
advantage by charging exorbitant fees for their services.



 

 

Generally, the factors that determine the exchange rate are either economical or political in
nature. Assuming that a country uses a freely floating/ flexible exchange rate, then there are a
number of factors that can affect the exchange rates but the major ones include; inflation rate
differentials, political stability, a country͛s relative level of economic growth and the balance of
payments (BOP) deficits. A country that has consistently low levels of inflation usually exhibits
an increase in value of their currency. On the other hand, a country with high economic growth
levels also exhibits an increase in value of its currency. A country faced by political upheavals
casts doubt on its own currency thus causing its value to decrease.


 

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It is quite hard to get impartial information from the forex market and as such the tourist
should be keen and also thorough in his/her search for the best tourist exchange rates. The
tourist should not settle for what they run into the first time, but should move around a bit to
gauge the best possible rates out there. Note should be taken that the little extra cent that one
can save from striking the best deal can ultimately sum up to quite a significant sum in terms of
the foreign currency.