THE KNOWLEDGE ASK THE EXPERT


Currency clues


Mar Bonnin-Palmer explains how best to deal with exchange rate fl uctuations


How much can the exchange rates aff ect the fi nal price I have agreed? Exchange rates fl uctuate constantly. So, it is likely that the exchange rate at the time of putting in an off er on a property and the rate at the time of completion – usually two to three months after – isn’t the same. If you have agreed on a price in euros but are holding a diff erent currency, this can aff ect your budget. As a result, the exchange


rate will directly impact the price you pay. This is why it is essential to take fl uctuations and the risk they pose for your budget into account from the very early stages of the process and understand the options you have to mitigate or minimise the impact.


I have a very strict budget, and I cannot aff ord any increase in the costs of buying a property in France. How can I make sure that the exchange rates won’t aff ect the price initially agreed upon when I found the property? If your budget is sensitive to rate changes, consider fi xing the exchange rate when you pay your deposit. Locking the rate will eff ectively determine the fi nal price and remove any uncertainty or potential risks associated with exchange rate fl uctuations. You can do this with the help of a specialist foreign exchange service using what’s called a forward contract (which may require a deposit). If you were planning to


exchange your funds using your high street bank, it’s important to remember that they only tend to off er these


92 FRENCH PROPERTY NEWS: July/August 2023


options to individuals if it is a substantial transaction.


When the exchange rate moves, the movement lasts only for a very short time. How can I ensure that I can take advantage of a rate if the change is brief or if it happens at times – early in the morning or late at night – when I am not available? Exchange rate movements can happen surprisingly quickly. Although market experts can use data to help predict them, unexpected events such as Covid


“Changes in the exchange rate will directly impact


the price you pay for your French property”


or the Ukrainian confl ict can change things rapidly and with little notice. Economic information creates


ups and downs in the foreign exchange market throughout the day. This means there is an opportunity to take advantage of positive movements that sometimes don’t last very long. Specialist foreign exchange providers allow you to target these movements and automatically buy the currency at that desirable rate even if you are out of the offi ce or asleep – even if the change happens in the blink of an eye. ■


Mar Bonnin-Palmer is Head of Partnerships at Moneycorp mar.bonninpalmer@ moneycorp.com moneycorp.com


© SHUTTERSTOCK


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