Best Currency for NRFC Account Holders

worthiness · 1 Best Currency for NRFC Account Holders Tue Mar 26, 2013 11:48 pm

worthiness

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Considering the current global economic events, what would be the most favorable & appreciable currency for Sri Lankan expatriates NRFC deposit accounts in the future.
US$, Euro, Yen, Yuan, Sterling Pound, AUS$, Sin$ etc..Please support the reason for your choice.

Antonym · 2 Re: Best Currency for NRFC Account Holders Wed Mar 27, 2013 12:05 am

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The USD will remain strong. But I will go with the Chinese currency (RMB) because the US will persuade China to strengthen the renminbi against USD.

Just check whether you will lose due to the higher spread between the bank's Buy and Sell rates, in the case of RMB.

traderathome · 3 Re: Best Currency for NRFC Account Holders Wed Mar 27, 2013 7:51 am

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Australian$, canadian$ and swissfrank (chf)

worthiness · 4 Re: Best Currency for NRFC Account Holders Wed Mar 27, 2013 9:57 am

worthiness

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@antonym,TAH
Thanks for your contribution. It is the good point to see the spread flows between buying & selling prices. Bankers say very few attract on chinese currency. Banks prefer to offer higher rates on demand for popular currency.

Slstock · 5 Re: Best Currency for NRFC Account Holders Wed Mar 27, 2013 10:07 am

Slstock

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AUs$ and CAn$ actually went up a lot during last few years. Think the US$ is rather stable. Yen is also something yo look at but we need to look at how world economy is heading.

In Sri Lanka am not sure the demand for currencies as the Chinese. So it is best to look at the buy sell speared as if you want to dispose in a hurry. Means look for liquidity also, US$ fits the bill.

worthiness wrote:@antonym,TAH
Thanks for your contribution. It is the good point to see the spread flows between buying & selling prices. Bankers say very few attract on chinese currency. Banks prefer to offer higher rates on demand for popular currency.

Last edited by slstock on Fri Mar 29, 2013 10:57 am; edited 1 time in total

salt · 6 Re: Best Currency for NRFC Account Holders Wed Mar 27, 2013 10:16 am

salt

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Best is USD if you are looking for 3-5 years
AUD & CAD has run up in commodity booms, they are in decline stage, migt fall even sharply
no Chance for CAD as they have openly capped at EUR 1.2
CNY will be fully convertible within 5 years, might appreciate, but system is not fully transparent
JPY is suing deliberate policy of weakening its currency
USD has gone up in the recent past, it might fall slightly if situation in Euro strengthen. but, will keep head above with LKR

traderathome · 7 Re: Best Currency for NRFC Account Holders Wed Mar 27, 2013 10:57 am

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for all the uncertainties in the world .......

ath dutui pratyakshai GOLD......

oong kiwwa....

So all AUD/CAD & CHF should do well know Smile

traderathome · 8 Re: Best Currency for NRFC Account Holders Wed Mar 27, 2013 10:59 am

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On the weekly chart below 1550 a sell may trigger thats not good .......

lets see

Dileepa · 9 Re: Best Currency for NRFC Account Holders Wed Mar 27, 2013 7:01 pm

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If you are working abroad, It is best to keep NRFC in another currency.
I get my salary in YEN and I have my NRFC in USD.
That way I can take the full advantage of currency fluctuations.
When YEN/USD rate goes down I transfer money to NRFC(USD)
and when RS/USD rate goes up I transfer cash to RS(CSE Very Happy

)

thighrokker · 10 Re: Best Currency for NRFC Account Holders Fri Mar 29, 2013 6:37 am

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An NRFC gives around 2% for USD. If you put in a NRFC FD you get 4%/Year. But if you put in a LKR FD you can get around 15%.
Also once you put in a sri lankan NRFC, you can only take it out as Rupee. So though you think you have $, in reality you are only able to get rupees out.
So i think its better to put in a LKR FD and get a higher return on interest, rather than keep waiting for a uncertain exchange-rate gain.

kukumarx · 11 Re: Best Currency for NRFC Account Holders Fri Mar 29, 2013 10:46 am

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thighrokker wrote:An NRFC gives around 2% for USD. If you put in a NRFC FD you get 4%/Year. But if you put in a LKR FD you can get around 15%.
Also once you put in a sri lankan NRFC, you can only take it out as Rupee. So though you think you have $, in reality you are only able to get rupees out.
So i think its better to put in a LKR FD and get a higher return on interest, rather than keep waiting for a uncertain exchange-rate gain.

SLR is good only for the short term. In the long term (couple of years or more) the SLR will depreciate. This is the risk if you hold SLR. Also if you are a taxpayer, SLR accounts attract 8% tax on interest. There is no tax on interest on foreign currency accounts.

About which currency to invest in- its a very tough call. The currency market is one of the most unpredictable markets with a large number of variables. Even professionals who work full time on the currency markets often get it wrong.

However there is one prediction I can make with certainty- Given Sri Lanka's budget deficits and inflation, the Sri Lanka Rupee will- with time- definitely head south.

Antonym · 12 Re: Best Currency for NRFC Account Holders Fri Mar 29, 2013 10:54 am

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kukumarx wrote:
SLR is good only for the short term. In the long term (couple of years or more) the SLR will depreciate. This is the risk if you hold SLR. Also if you are a taxpayer, SLR accounts attract 8% tax on interest. There is no tax on interest on foreign currency accounts.

About which currency to invest in- its a very tough call. The currency market is one of the most unpredictable markets with a large number of variables. Even professionals who work full time on the currency markets often get it wrong.

However there is one prediction I can make with certainty- Given Sri Lanka's budget deficits and inflation, the Sri Lanka Rupee will- with time- definitely head south.

@kukumarx: Some good inputs there.
My advice would be: If you want to keep your money in foreign currency, go for US Dollars; it's relatively safer.

rainmaker · 13 Re: Best Currency for NRFC Account Holders Fri Mar 29, 2013 11:28 am

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The United States Dollar is the currency of choice in the business world
Holding the USD enables one to purchase US sovereign securities

Even though the interest rate may not be high, by presenting a US Bond one can borrow funds in a similar fashion to LKR t bills/bonds

If you take the letter you get from the SL Public Debt Office to BOC/NSB/Peoples, they will give you immediate funds and will secure the govt certificate as security

traderathome · 14 Re: Best Currency for NRFC Account Holders Fri Mar 29, 2013 12:02 pm

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i prefer GOLD Very Happy

pratyakshai...atdutui cheers

TAH

kukumarx · 15 Re: Best Currency for NRFC Account Holders Fri Mar 29, 2013 12:34 pm

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traderathome wrote:i prefer GOLD

pratyakshai...atdutui

TAH

So Do I- but the problem is gold fluctuates a lot. For instance in 2011 it was US$ 1850/- per ounce. Currently it is US$ 1620 per ounce.

By the way is holding gold as an investment accepted by Inland Revenue? Holding it for personal use as jewellery is allowed but as an investment?

For an investment, one has to buy 24 karat sovereigns or bars. (Forget jewellery which involves making charges and wastage) Some time ago one could go to a bank and officially buy gold and get a receipt. (1995/96). Is it still possible to do so?

Otherwise, can I for instance buy so many sovereigns form a jeweller (without a receipt) and show it on my wealth declaration. And when the price moves up sell it and show the profit?