Sunday, March 05, 2006

Korean Won -- Poor Exchange in the Philippines

Well, here I sit in Manila at an internet cafe that is entirely geared to Korean customers, complete with Korean software and Korean homepages for all the major websites, not to mention the Hangeul (Korean writing) keyboard and yet there is a bit of a mystery to resolve.

The exchange rate for Korean won on the streets is ridiculously poor. In Boracay and in the exchange shops in Malate, Manila the going rate is a mere 400 Pesos for 10,000 won. That is 127 Pesos short of the exchange rate stated by the Bank of Canada's website at:

This means that if you have brought Korean won with you on your vacation you can expect to lose US$2.60 for every US$10 value that you exchange in Korean currency! This, on the face of it, means a 26% profit for money exchangers in the Philippines. But it can't be that simple.

The rates offered in the same shops for Canadian, U.S., Pounds and Euros are only off the 'official' rates by 5 to 10%. I wonder why it's so bad for Korean won? I expect that it is probably something to do with the tight fists of the Korean government.

I recall not so long ago a friend of mine was trying to transfer some of her money home to New Zealand only to be told by the bank that she had to fill out some special government forms, because of a restriciton on the amount of money flowing out of the country.

Luckily, I haven't encountered any such problem, but I was quite surprised once last Christmas when I was transferring quite a large heap of money. The bank contacted my employer to see if I had actually earned all of that money or if I'd somehow stolen or embezzled the funds!

Naturally, I was beside myself with rage. Banks in Canada do not have that sort of latitude they might ask me for some sort of proof of income but would never directly contact my employer in such a remarkable act of privacy invasion -- at least I hope I'm right about Canadian banks.

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