Exchange Rate of Due-Currency Salary
The exchange rate is the rate at which one currency is converted to another. The currency exchange rate varies all the time determined by the international market. The exchange rate we will be dealing with is between Chinese Renminbi (CNY/RMB) and South African Rand (ZAR).
Exchange Rate From FNB
To ensure that the exchange rate we are using is up to date and fair to all parties, we are using the exchange rate from First National Bank (FNB). You can view the rates by clicking the "View Rate" icon on the FNB foreign exchange website. This FNB web page is always up to date, and you can also search for historical rates via the search function highlighted in the picture below.
Many of you are probably wondering, why don't we simply use the exchange rate from Google or any other currency converters on the internet.
The reason is the exchange rate shown by these online converters are what's called the mid-market rate. The mid-market rate is the average of the selling and buying prices of a currency. The mid-market rate is just an indicator, and not the actual rate currencies are exchanged. Many of the online currency converters, such as XE.com, explains the mid-market rate in their disclaimers.
Which Exchange Rate Do We Use?
Every month, the exchange rate that we use will be the end of the trade day value on the 20th day of each month.
The teachers can review the exchange rate using the search function mentioned earlier. Note that since we are using the end of trade day value, the search result will only be meaningful from the 21st onwards. If the 20th fell on a day of no trades (such as Sundays), the exchange rate for the previous trade day will be used instead.
Fixing the exact time the exchange rate is sampled will eliminate the possibility of any parties trying to take advantage by waiting for a more favourable exchange rate, ensuring fairness to all parties.
The exchange rate we will be using is shown in the figure below, under the Bank Buying TT column. Let's look at these different rates in more detail to help you understand why we use this specific rate.
Let's first look at the last column, which says Bank Buying Notes. The word Notes means the transactions using hard cash, therefore inapplicable.
Now let's look at the differences between Bank Selling and Bank Buying.
Let's first look at the Selling column. When someone is selling something, he/she is surrendering the possession of "something" or giving "something" away. The Bank Selling column means the rate at which the bank is giving away CNY. Hence the rates at which the bank is giving us CNY in exchange for our ZAR. This is the opposite of what we want.
Now let's look at the Bank Buying column. When someone is buying something, he/she is taking possession of the "something", in other words, accepted "something". What the Bank Buying column means is the rate at which the bank is accepting/taking CNY. Hence the rates at which the bank give us ZAR in exchange for our CNY. This is what we want. Therefore we must use the Bank Buying column for the Chinese Renminbi.
CNY/ZAR Exchange Calculation
To calculate how much CNY you need to exchange a certain amount of ZAR, first decide on how much ZAR you want to exchange.
Next, on the exchange rate table, find the Bank Buy TT/Chinese Renminbi value and multiply it with the ZAR value.
For example, you want to exchange R5000. You look up the table and find the Bank Buy TT/Chinese Renminbi value to be 0.4211. You then use:
5000 x 0.4211 = 2105.5
Hence, the amount of CNY you need for the exchange of 5000 Rands is 2105.5 Yuan.
Hope this article was able to help you better understand our free instant currency exchange service Due-Currency Salary exclusive to Teach To Rich. For any inquiries feel free to email us @ money@teachtorich.com.