Exotic Currencies – Everything You Need To Know About Them
Forex markets across the globe have divided currencies in three groups: Major, Minor, and Exotic currencies. The reason for this classification is on the basis of the how well they trade in the currency market.
What are Exotic Currencies?
So Exotic currencies are those currencies which trade thinly or at low volumes. They are illiquid and lack market depth. Trading at low volumes does not necessarily mean weak or undervalued currencies. Exotic currencies don’t show a popular behavior in the trading market and are available in very limited volumes. For example, the Kuwaiti dinar (KWD) is the highest-valued currency in the world but is considered an exotic currency because it trades thinly.
List of Exotic Currencies
Some of the more active Exotic currencies include the:
–HKD – Hong Kong Dollar
–MXN – Mexican Peso
–SGD – Singapore Dollar
–KRW – South Korean Won
–ZAR – South African Rand
–RUB – Russian Federation Ruble
–INR – Indian Rupee
|Currency Symbol||Currency Name||Currency Symbol||Currency Name|
|AED||UAE Dirham||ARS||Argentinean Peso|
|BRL||Brazilian Real||CLP||Chilean Peso|
|CNY||Chinese Yuan Renminbi||CZK||Czech Koruna|
|EGP||Egyptian Pound||HKD||Hong Kong Dollar|
|HUF||Hungarian Forint||IDR||Indonesian Rupiah|
|ILS||Israeli Shekel||INR||Indian Rupee|
|IRR||Iranian Rial||ISK||Icelandic Krona|
|JOD||Jordanian Dinar||KRW||South Korean Won|
|KWD||Kuwait Dinar||MXN||Mexican Peso|
|MYR||Malaysian Ringitt||PHP||Philippine Peso|
|PLN||Polish Zloty||RUB||Russian Ruble|
|SAR||Saudi Arabian Riyal||SGD||Singapore Dollar|
|THB||Thai Baht||TRY||Turkish Lira|
|TWD||Taiwanese Dollar||ZAR||South African Rand|
Currencies that trade in higher volumes are called Major Currencies.
—US Dollar– US Dollar has been the world’s leading reserve currency for years. US Dollar is at the other end of 86% forex trading transactions every day.
—Euro– The common currency of European Union—the largest economy in terms of GDP in the world. Euro is at the other end of 36% forex trading transactions every day
—Yen– Yen is the official currency of Japan. And Japan is the world’s third-largest economy by GDP. Yen has the second largest trading volume with 17% of total forex transactions every day. One of the other reasons for Yen being a major currency is because of Tokyo being a major forex dealing center which leads to increase in the trading volume
—Pound Sterling– GBP is the currency of the United Kingdom, the 6th largest economy by GDP in the world. GBP is part of the 15% of the total Forex trading transactions. One of the advantages of GBP trading in higher volumes is because of London is a major financial and fore trading centre. This leads to higher volumes in Forex trading.
—Swiss Franc- Swiss Franc is a safe currency to have. Though no longer convertible to gold, CHF trades highly in the forex market. The forex trading volume is 7%. Because of Switzerland being a neutral state, Swiss Franc acts as a reserve currency and has significant importance in international commerce and Banking.
The other name for Minor currencies is Commodity Currencies or Com Dollars. These are minor currencies that belong to countries that have resources particularly natural which give the currency of their country an edge, an intrinsic value. Because of this, the currency value is linked to the value of the natural resources or commodities the country produces such as oil or gold.
—Australian Dollar-AUD or Australian Dollar is the official currency of Australia. And Australia is the 13th biggest economy in terms of GDP. AUD is at the other end of 6.5% of all forex trading transaction daily.
—New Zealand Dollar– New Zealand is the 52nd largest economy in the world. NZD is at the other end of 2% forex trading transactions daily.
—Canadian Dollar- Canadian Dollar or the Loonie is the 10th largest economy by GDP. CAD is at the other end of 4.2% forex trading transactions of total forex volume.
In addition to the commodity currencies, the Minors also include the Scandinavian Currencies.
How To Exchange Exotic Currencies?
Exotic currencies are not easily available in the market because they trade at thin volumes. So the best option for you would be to Converthere in India. It will be cheaper for you. Converting Rupee to an exotic currency in India, if available, will be very expensive. You can obtain USD for Inter-bank Rates + 0.5% surcharge with . And you will be able to exchange USD to the local currency in that country for the same margin. You’ll only end up paying 1% conversion charges. Never change currency at an Airport as they literally rob you. Changing currency at an airport is an expensive proposition.
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