Jasmine Birtles
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How Exchange Rates Are Affecting Your Overseas Transfers in 2025
Moneymagpie Team
15th Jul 2025
Exchange rates are a key consideration for anyone making international transfers, as they affect how much the recipient actually receives. In business landscapes, exchange rates could be all the difference between loss and profit.
It is a well-known fact that exchange rates are subject to rapid fluctuations in response to real-time market shifts, new policies, economic health, and other factors. Sometimes, these fluctuations could be predicted and appropriately anticipated.
However, with exchange rates now highly volatile across multiple currency pairs, 2025 has proven to be a difficult year for such speculations.
The IMF Global Financial Stability Report, April 2025, suggests that heightened trade policy uncertainty is a critical factor fueling higher exchange rate volatility.
These uncertainties, founded on tariff wars and rising global socioeconomic and political tensions, don’t seem to be letting up anytime soon.
People who frequently transfer money abroad for personal or business purposes need to buckle up and deepen their understanding of how exchange rates work and how to navigate the market to save every cent worth saving.
- What Are Exchange Rates and Why Do They Matter?
- Personal Transfers: How Everyday People Are Affected
- Mitigating the Impact: Smart Transfer Strategies
- Conclusion
What Are Exchange Rates and Why Do They Matter?
Put simply, an exchange rate is the price of one country’s currency against another. It is how much of a currency you can use to purchase another currency.
As at 14 July 2025, you could use 1 USD to purchase 86.02 INR (Indian rupees), according to Google Finance . This means that the USD-INR exchange rate is 86.02.
Note that earlier on the same day, the USD-INR was 85.49 INR, indicating a 0.53 increase over a few hours. By the end of the day, the rate could be higher or lower depending on the prevailing market conditions.
So, why do exchange rates matter?
Suppose you sent 500 USD to a relative or business partner in India when 1 USD could get you 86.02 INR. Ideally, they would receive 43,010 INR.
But at 85.49 INR per USD, they would receive 42,745 INR. In this hypothetical scenario, the relative or business partner expecting 43,010 INR would get 265 INR less.
Additionally, depending on the channel you are using for the transfer, you have to consider other costs, including:
- Spread: The difference between the price at which a financial institution sells and buys a currency. Suppose a platform sells a USD to you at $1.03 but is willing to buy back from you at $0.97. The platform could be said to have a 6-cent spread.
- Conversion costs: Other service fees and charges that the financial institutions apply to your transaction, depending on the payment and payout options you choose.
Bearing in mind the sense of uncertainty surrounding the global forex market, these exchange rate considerations are worth mulling over every time you want to initiate an international transfer.
Personal Transfers: How Everyday People Are Affected
As currencies gain or lose strength over the minutes, hours, days, or months, people sending money back home feel the impact in real time.
Recall the USD-INR scenario above.
The time at which the sender initiates the 500 USD transfer determines if the recipient would gain (at 86.02 INR per USD) or lose (at 85.49 INR per USD) 265 INR at their end.
Interestingly, the INR categorically strengthened against the USD at 85.49, compared to 86.02. Ordinarily, this should translate to a strengthened economy. But since the gain is short-lived, it doesn’t materialize as nationwide economic growth in India.
The overall purchasing power remains the same. Therefore, both the sender and recipient feel it as a loss, rather than a benefit.
Exchange rate losses are further compounded by other service fees that the financial institution applies to your transactions. According to the World Bank’s Remittance Prices Worldwide database, these fees could be up to 12% of the transaction amount when sending money abroad through traditional banks.
Losses as a result of exchange rate volatility and conversion fees could be all the difference between the recipients back home being able or unable to adequately cover hospital bills, school fees, or payments for other basic necessities.
Mitigating the Impact: Smart Transfer Strategies
The World Bank data on global remittance prices also points out that mobile operators and money transfer operators, such as BOSS Money, rank as the cheapest channels for sending remittances.
They charge substantially lower fees and often offer favorable exchange rates with lower spreads.
Take the USD/NGN exchange rate for instance.
Where the mid-market rate was at 1,527.95 (July 14, 2025), the rate on BOSS Money site was at 1,553.83 on the same day.
This level of difference in exchange rates across financial institutions highlights the need to:
- Compare rates across platforms.
- Consider the fees and spreads that the provider applies to each transfer before moving forward.
- Use tools like Google Finance watchlist to automatically monitor and get notifications on rate trends among currency pairs you frequently exchange.
You can also maximize cost savings by opening multi-currency accounts with currencies you work with often, as well as scheduling your transfers for periods with generally favorable exchange rates.
By being smart with your transfers, you may find yourself easily saving hundreds of dollars annually on your overseas transfers.
That’s some money that could go a long way in improving the lives of your relatives back home.
Conclusion
It is undeniably clear that current knowledge of exchange rate trends is a critical skill to have in 2025. The USD/INR and USD/NGN examples presented in this article highlight how small percentage changes on the same day and across platforms can make a big difference.
Staying abreast of these differences can help you make the most of every cent you send back home.
This post is your sign to use smart tools, plan ahead, and compare transfer services before you initiate any overseas transfer.
Disclaimer: MoneyMagpie is not a licensed financial advisor and therefore information found here including opinions, commentary, suggestions or strategies are for informational, entertainment or educational purposes only. This should not be considered as financial advice. Anyone thinking of investing should conduct their own due diligence.
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