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The Pound and the Yuan

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Shanghai Expat Forum Index » City Living Forums » Questions and Answers

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woaishanghai07

Barker

Joined: Dec 26, 2007
Posts: 157

Status: Offline

Posted: Oct 23, 2008 - 09:48 AM
Post subject: The Pound and the Yuan

I've been planning on sending about £1500 back home soon and I've been checking the exchange rate to work out how much RMB I need to put together in order to send that much back. 2-3 weeks ago, I checked the rate and £1500 was 18000RMB, today £1500 is 16,660RMB.....That seems like a huge difference in just a few weeks.

Now I wasn't planning on sending that money back to the UK until next year (cause I'm a poor English teacher so it takes a while for me to save that money) but looking at the way the exchange rate has gone I'm wondering if it's a good idea to send some money sooner rather than later.

Does anyone know what's gonna happen to the pound against the RMB in the next few months? Is it better for me to send money now or wait a while for the exchange rate to be more in my favour?

I plan on staying in China for a few years, god knows how long exactly, but I like to have money tucked away in the UK for when/if I decide to go back there one day. Would it maybe be a better idea for me to keep my money in China or should I still send it back to the UK?

CK1

LoopKicker

Joined: June 07, 2007
Posts: 915

Status: Offline

Posted: Oct 23, 2008 - 10:03 AM

I lived for a long time with the reasoning that 1 pound = 15 yuan, it was a shock to the system when I had to realise it was nothing near that nowadays!

seanryan471

Reacher

Joined: Aug 08, 2008
Posts: 307

Status: Offline

Posted: Oct 23, 2008 - 10:10 AM

The short answer is: there's no way to know. Trying to figure out what the exchange rates will do tomorrow let alone 3 months, 6 months, 1 year, or 5 years down the road is nearly impossible. Go back 1 month and see how many economists (or traders for that matter) could have accurately predicted what is happening to global exchange rates right now. My guess is not many, if any. Sure, there are trends that reasonable people can point out to argue for the rate going up versus down, but those trends are known and common knowledge. Economic theory says those events and assumptions are already built into the price. Anyone who claims to have knowledge of the direction of future exchange rates is probably blowing smoke. The common finance professor response is, "They would be too busy making money trading currency to ...."

My advice is to keep your currency wherever it will be of most use to you without regard for what your thoughts on foreign exchange are.

jzzzzzzz

Veejay

Joined: July 07, 2006
Posts: 2037

Status: Offline

Posted: Oct 23, 2008 - 10:15 AM

Yes over the summer it fell to £1 = 11 and then last week bounced back to around 12.5. Now back to 11.

Who knows.

niubi

Talker

Joined: May 14, 2008
Posts: 102

Status: Offline

Posted: Oct 23, 2008 - 10:03 PM

seanryan471 wrote:

WRONG. This forum is loaded with people that foresaw the subprime meltdown and moved everything they had to cash right at the top.

A little pound/RMB forecast should be nothing. WoAi, you've come to the right place for advice.

JakeF

Newbie

Joined: Oct 24, 2008
Posts: 6

Status: Offline

Posted: Oct 24, 2008 - 04:59 AM

I was in China last year for 6 months and was very much used to 100RMB being about 7 quid, so the pound weakening so much for it to drop to 11 is slightly concerning as im planning on coming back next summer and the summer after, but oh well, a combination of a looser monetary policy by the Chinese and the pathetic state of the British, world for that matter, economy.

if your paid in RMB, which i assume you are, and you want to send money back here to the UK, the weaker the pound is, ie, now, the better it is for you. As an economist, I dont feel the pound will drop any lower against the RMB and is very unlikely to drop below 10.5 to the pound. The weaker the pound, the less RMB is needed to get yourself a good old British pound Smile

I also believe that keeping your money in China would do you no harm either as i think the ER is going to keep within the 11-12.5 boundary for some time.

GC
The Ginger Prince

Joined: Dec 01, 2003
Posts: 22198

Posted: Oct 24, 2008 - 06:48 AM

It was about 12 in 2003, rose to 15 and then in 2004/2005 it fell due to the way in which the currency was evaluated(quick way to make money as they told you in advance). It naturally went back up again but now it's all gone to ****.

We import from China as well as buying from suppliers in the UK who import from China. The UK suppliers have had to increase their price by about 25%. Luckily we have funds in China and are currently using that to buy in China and import ourselves.

As for returning money to the UK, personally I wouldn't. China may be facing problems with reduced exports but with the surplus they have banked in recent years they are in a far better position to ride it out than the UK is.

woaishanghai07 wrote:

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