Saving forex loss: Avoid converting INR!

If you are traveling abroad from India and try to use INR to get local currency and end of the trip you sell local currency back to get INR, you are losing big time- as much as 100% of the value.

Refer to this char at Bangkok. If you need to buy about 1000 THB, you have to pay around 5000 INR.
End of your trip, if you return 1000 THB, you will only get about 3000 INR, almost 2000 INR or 40% value is lost.

We used to get 1000 Thai Baht for 2000 INR a decade ago, now rupee has been devalued 2.5 times. We need 5000 INR for same 1000 Thai Baht now.

On the other hand, if you use USD to buy THB and later give remaining TBH and get USD, you only lose 2-3%. 

This is because

• - Rupee is losing value fast against international currencies
• - There isn't much demand for rupee, so forex shops lose more if they are to hold INR no one is buying

Due to those risks most forex shops abroad either do not even stock/take INR or if they take, they give very poor exchange rate to cushion their profit margins.

So what is the way out? How can we reduce losing on forex conversion during our travels?

#1 Stock USD and Euro

In India, Buy USD or Euro and keep them with you. If your friends/relatives are coming from US/Europe, ask them to bring some cash, pay them INR at prevailing rate and keep this cash

USD and Euro appreciate over time, so you gain to benefit. Last year 1 USD was 84 INR, now 95. Euro also has appreciated 7-8% in an year.

When you travel, use these USD/Euro to buy local currency, end of the trip, give remaining local currency and get USD/Euro, NOT INR

#2 Prepay where possible

Instead of paying in cash in local currency upon arrival, some expenses like hotel booking, tours etc can be paid online from India before departure. This will reduce need for local currency and risks associated with non-acceptance of rupee, rupee losing value further etc

#3 Use forex card, credit cards with zero forex markup

Like this Uni Gold allows international transactions with zero forex markup

You can buy a forex prepaid card, load with some cash and keep it.

#4 Take minimum cash

Make a fair estimate of how much local currency you may need- Convert only that much, not too much excess. This way, you won't have huge amount of local currency to exchange back to INR or USD.

A small amount left

• - You can keep as souvenir, 
• - Use it to buy something at airport on your way back,
• - Give to friends/relatives who may travel to that country again
• - Use it during your next trip or during trip to neighboring countries (like Few excessive MYR can be exchanged during next trip to Singapore to SGD

Besides currency conversion, there will be hidden charges like service charge, GST on service charge, airport convenience fee and other unknown/untold expenses that impact overall value. Where possible exchange only a small amount for urgent needs at airport, withdraw more from a bank in city later.

Let me know your thoughts